(Filed Under Financial and General Interest News). Question: “There is a possibility that more than one large factoring company might merge with another; or that one or more large factor might disappear at some time in the next year. What impact would the consolidation or elimination of a large factor have on the availability of credit to the apparel industry? Do you foresee a situation where some wholesalers may not be able to factor receivables that they were able to factor in the past? Do you have any other comments on the situation?”
Answered by John La Lota, president of Sterling Factors Corp.
“If there is consolidation in the industry, most apparel companies should be able to sign on with another factor. It all depends on the financial condition of the borrower. The weaker companies might have to seek out alternative financing, which would be more expensive.
“If a company is concerned about the viability of their factor, they should look to make a change as quickly as possible. They should also seek out one with stability and strength, preferably one owned by a bank.
“Its tough enough running a business in this economy without having to have to worry about whether or not you will get funding if something happens to your lender."
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