18/06/2024 9:40 PM

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Piece of That Fashion

New Small Fashion Brand Financing Options in 2022

pile of money

For many small fashion brands, finding the right and manageable financing can be hard. While traditional loans may work well for some, they aren’t always easy to secure nor do they fit all needs. In 2022, though, brands have more o options than ever.

Growth Financing

With a growth financing model, the financer will plug into your store’s back-end to read business performance and understand your growth margins, utilizing that info to inject capital into your business. These companies finance brands that show this growth and if your business has DTC sales, you have proof of recurring revenue. This is a safer option as there is no personal liability for loans because they’re tied back directly to business performance as the business assumes the risk, not the individual.

There are multiple companies out there that offer a growth financing plan, such as Settle or Clear Bank. Do the research to find what works best for you, and consider:

  • Multiple options
  • Who has best terms
  • Best fit overall

Equity Crowdfunding

This option has gained more and more traction over the years as it lets you sell pieces of your business to your most loyal fans, raising funds directly from consumers. As they are already fans of your brand, this is almost a guarantee that they’ll continue to purchase from you as well as evangelize your brand to others, as they now have a personal stake.

Friends & Family

The majority of brands will raise at least the first amount of funds through friends and family. Even so, using a tool such as an equity crowdfunding site can be useful. It makes sure you are raising funds in a clear and official way, following rules & regulations. This lets them take advantage of being early investors and preserves your relationships while setting up the business to succeed.

At Scaling Retail, we help brands allocate funding to increase revenue, launch and grow successfully in an ever-evolving retail world. Send us an email to [email protected] to start the conversation.