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Updated November 4, 2026. First published March 6, 2025. Factor list checked against the AIMS360 financing integrations page, November 2026.
What is apparel factoring?
Factoring is financing against your receivables. A factor buys or finances the invoices you raise to retailers, pays you an advance, collects from the retailer when the invoice comes due, and settles the balance with you after its fees. The terms, including the advance, the fees and what counts as a credit loss, are set by your factoring agreement.
Apparel is the industry where factoring is ordinary rather than a last resort. Wholesale brands sell to a small number of large retailers on 30, 60 or 90-day terms, produce a season ahead, and carry concentrated credit risk on a few accounts. A factor solves two problems at once: it shortens the wait for cash, and its credit department watches your retailers for you.
Two documents run the whole relationship. The credit approval is the factor accepting a specific customer's credit for a specific order, before it ships. The invoice assignment makes the invoice the factor's receivable, with remittance language telling the retailer to pay the factor. Most of the cash delay in factoring comes from these two steps being slow or wrong.
How does a factored order flow through AIMS360?
Here is the loop from order to reconciled statement, the way it runs on the factor approvals and assignments feature.
- Mark the customer as factored
Each customer whose invoices go to a factor carries that factor on its account. Moving a group of customers to a factor, or back to house, is one global change.
- Send orders for credit approval
In credit approvals, pick the factor, choose the orders never sent for approval, tag them and submit. AIMS360 builds a batch and transmits it to factors with an electronic connection.
- Get the decisions back
The factor's response writes the approval code, approved amount and date onto each order, and approved orders move from hold to open.
- Decide what a decline does
Set once on the factor record: cancel the order, or keep it on hold so someone can ask for a deposit, a card payment or a smaller order.
- Ship and invoice what shipped
Invoices are raised from what left the building, so partial shipments invoice correctly. Each factored invoice prints the factor's assignment notice, up to 400 characters.
- Assign invoices to the factor
In factor assignments, create a new assignment from the invoices not yet assigned and send it electronically, or export it to Excel with invoice copies if the factor wants paper.
- Reconcile the factor statement
When the statement arrives, payment reconciliation matches it against your invoices, credits and chargebacks, with the statement total as the control figure.
EDI retailers follow the same path. The 810 invoice is built from the same shipment as the 856 ship notice, so the factored invoice, the ASN and the cartons agree. For bulk EDI programs the bulk order goes to the factor for approval, not each release order, because releases rarely arrive early enough to approve.
How does an apparel ERP improve cash flow?
Factoring is one lever. The ERP decides how fast it pays out, and several other settings decide how much cash is tied up in the first place.
| Where cash gets stuck | What fixes it | In AIMS360 |
|---|---|---|
| Orders ship without approval | Approval comes before allocation and picking | Unapproved factored orders stay on hold |
| Invoices reach the factor late | Assign on the day you invoice | Batch assignment from unassigned invoices |
| Retailer pays the brand, not the factor | Correct remittance language on every invoice | Assignment notice prints on factored invoices |
| Financed orders ship last | Ship what the factor has approved first | Allocation rules can prioritize factored orders |
| Deductions eat the payment | Tie each chargeback to the shipment | Chargeback management on the same record |
| House accounts pay slowly | Credit holds at order entry, card or ACH on file | Accounts receivable and AIMS360 Payments |
| Too much stock bought too early | Produce against orders, not hope | Allocated WIP builds production from open orders |
None of this replaces a good factor. It removes the days lost between an approved order and a funded invoice, which is where most brands leak cash without noticing.
Factoring, bank line, credit insurance or net-terms financing?
Brands often combine these. This table is vocabulary, not advice; the terms of any product are set by the lender and your agreement.
| Option | What it is | Who carries retailer credit risk | Fits when |
|---|---|---|---|
| Factoring | A factor finances or buys your receivables and collects them | The factor, on credit-approved non-recourse sales | You sell retailers on terms and want their credit watched |
| Bank line of credit | A revolving loan against your balance sheet, often secured by receivables and inventory | You | You have strong financials and want lower cost |
| Trade credit insurance | A policy that pays if an insured customer cannot pay | The insurer, within policy limits | You collect yourself but want protection |
| Purchase order or trade finance | Funding to pay a supplier before goods are made | Varies | Production needs cash before there is an invoice |
| B2B net-terms financing | A provider pays you and offers your buyer terms | The provider, on approved buyers | Smaller wholesale accounts that want terms, such as Resolve |
Recourse and non-recourse are the terms to read most carefully. Broadly, non-recourse means the factor absorbs the loss if a credit-approved customer cannot pay for credit reasons, and recourse means that risk stays with you. Disputes, returns and chargebacks are usually yours either way.
Which apparel factoring companies work with AIMS360?
The financing integrations page lists the current factoring and financing partners. As of November 2026:
| Factor | Notes |
|---|---|
| CIT Commercial Services | Now part of First Citizens Bank; bought HSBC Bank USA's US factoring business in 2003 |
| Hana Financial | Los Angeles lender: factoring, purchase order and trade finance, credit protection |
| Hilldun | Fashion factoring integration |
| Merchant Financial Group | Factoring and finance integration |
| Milberg Factors | New York factor, founded in 1937 |
| Rosenthal | Fashion factoring integration |
| SLR Business Credit | Bought Webster Bank's factoring business in September 2024; Sterling, Webster and First Capital factoring books sit here now |
| Truist Financial | Formerly BB&T commercial finance |
| Wells Fargo | Bank-owned commercial services |
| White Oak | Formerly Capital Business Credit |
| Resolve | B2B net-terms financing rather than factoring |
If your factor is not listed, the approval and assignment workflow still runs. AIMS360 exports the approval and assignment details to Excel in the layout the factor asks for, and connections are added as factors request them.
Which fashion and apparel factoring companies are reliable?
Reliable is about fit, not a ranking. A factor that is excellent for a $50 million department store vendor can be wrong for a $3 million brand selling boutiques. Ask these questions before you sign, and check the answers with two or three brands the factor already funds.
- Apparel experience. How many fashion brands does the factor fund, and does its credit desk already cover your retailers?
- Credit approvals. How fast do approvals come back in season, and how are declines explained?
- Electronic connection. Does it exchange approvals and assignments with your ERP, or will someone re-key orders into a portal?
- Recourse terms. What exactly is a credit loss under the agreement, and which disputes come back to you?
- Fees and minimums. How are commission, interest on advances and any minimum volume calculated?
- Reporting. Can you see your statements, approvals and chargebacks online, and reconcile them against your own books?
- Stability. Who owns it? Several well-known names have changed hands: HSBC's US factoring went to CIT in 2003, and Webster's to SLR in 2024.
AIMS360 does not recommend one factor over another. The factors on the financing page are the ones with a connection already built, which shortens setup if you pick one of them.
Apparel factoring and cash flow: FAQ
You ship a retailer on terms and assign the invoice to a factor. The factor advances money against it, collects from the retailer when it comes due, and settles the balance with you after fees. On credit-approved non-recourse sales the factor usually carries the risk that the retailer cannot pay. Your agreement sets the advance, fees and terms.
As of November 2026 the financing integrations page lists CIT Commercial Services, Hana Financial, Hilldun, Merchant Financial Group, Milberg Factors, Rosenthal, SLR Business Credit, Truist Financial, Wells Fargo and White Oak, plus Resolve for B2B net terms. If your factor is not listed, AIMS360 exports approvals and assignments to Excel in the factor's layout.
It depends on fit. Ask how many fashion brands the factor funds, whether its credit desk covers your retailers, how fast approvals come back in season, what counts as a credit loss, how fees are calculated, and whether it exchanges approvals and assignments electronically with your ERP. Check references with brands it already funds.
By removing the days between an approved order and a funded invoice. AIMS360 holds factored orders until the factor approves them, prints the assignment notice on each factored invoice, assigns invoices in batches on the day you invoice, prioritizes factored orders in allocation and reconciles the factor's statement against your invoices and chargebacks.
A bank line is a loan against your balance sheet, and the credit risk on your customers stays with you. Factoring is financing against specific invoices, and on credit-approved non-recourse sales the factor carries the customer credit risk. Factoring usually costs more and includes credit and collection services a bank line does not.
Broadly, non-recourse means the factor absorbs the loss if a credit-approved customer cannot pay for credit reasons, and recourse means that risk stays with you. Disputes, returns and chargebacks usually stay with you either way. Your factoring agreement defines the details.
The decline is written back to the order and the factor record decides the next step: cancel the order, or keep it on hold. Most brands keep it on hold so someone can ask the customer for a deposit, a card payment or a smaller order.
Yes, with a system setting. The full order amount still goes to the factor for approval, so agree with your factor in advance how a deposit and the approved amount relate.
Yes. Factored customers go through approval and assignment, house accounts do not, and both live in the same order and invoicing flow. A global change moves a group of customers to a factor or back to house.
Yes. For bulk EDI programs the bulk order is sent for approval rather than each release order. The 810 invoice is built from the same shipment as the 856 ship notice and carries the factor assignment like any other invoice.
This article describes the AIMS360 software workflow. It is not financial or legal advice: advances, fees, recourse terms and credit decisions are set by your agreement with your factor. AIMS360 is not affiliated with the factors named here.
