How To Get A Loan For A Clothing Brand

You’ve been designing clothing since you were a kid, and now you’re ready to get your own clothing brand started! This is an exciting time, but I’m sure a stressful one as well. Don’t sweat it, because I’ve got you covered. In this article, we’ll take a look at how to take out a loan for a clothing brand so you can easily fund your clothing brand dream!

To get a loan for a clothing brand you need to consider what your business expenses will be, how much of a monthly payment you can afford, and the various loan options you have available to you. Once you have done so, you are ready to apply for a loan.

Let’s dive into each of these factors individually to understand what things we need to decide on before applying for a loan. Then, once we have looked into these factors and determined what is best for your business, we’ll go through the steps of actually applying for a loan.

What are Your Business Expenses?

How to Get a Loan for a Clothing Brand

First things first, sit down and make a list of what your business expenses will be. This could include materials for your clothing, equipment to make the clothes, dye to dye the clothing, workers to help you make the clothing, marketing materials to advertise your brand, and a space to create your clothing. This list is certainly not all inclusive, nor do you have to include everything on this list in your business plan. These are simply things you may need to get started with your clothing brand. Once you have made a list of all the items you will need to get your business started, determine how much money you will need to spend for each item on your list. This will help you determine how much of a loan you will need to apply for.

This will be a part of your business plan and will be something loan providers will look at when determining whether or not they will approve your loan. So, make sure you don’t just make rough estimates or throw out numbers that don’t quite make sense. Be sure to do your research and understand how much money will need to be allotted for each expense.

How Much of a Monthly Payment Can You Afford?

Next, you’ll want to figure out how much of a monthly payment you can afford to make. Take into account all other personal expenses you may have including rent, student loans, phone bills, and any other big expenses you may have coming up i.e. vacation, medical procedures etc.

Once you take these into account, determine how much of an additional payment you can add on to this each month. This will help you determine two things. One being how much loan money you feel comfortable taking out, and two, what loan terms you should settle for. When I say loan terms, I mean how long you have to pay back the loan to your lender. The last thing you want to do is take out a loan that either results in monthly payments that are much higher than what you can reasonably pay back each month, or a loan that needs to be paid back in too short of a turnaround time. Both of these are going to come back to bite you in the butt, so do your homework and go into the process understanding your financial situation.

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Research Your Loan Options

Don’t go into anything blindly, taking out a loan is a big commitment and you’ll want to do your research and learn what is available to you. Different lenders are going to offer you different interest rates and time periods to pay the loan back. Like we talked about above, start by understanding how much of a loan you’ll need to take out, and then determine how much of a monthly payment you can make. 

You can apply for a loan online or in person, both have their pros and cons and there are reasons to go for both. Some argue that applying for a loan in person guarantees you a higher chance of approval since you have the opportunity to argue your case with the loan provider in person. On the chance that your credit score isn’t the greatest, this gives you the chance to vouch for yourself before they turn you down based just on a poor credit score. There are also some loans that don’t have an online option and need to be done in person or over the phone. So check out your options and see what’s available.

Then shop around to see where you can get the best deal at the best rate! If you are having trouble, the Small Business Association is a great tool to help you get started or answer any questions! They are built to help small businesses like yours get started, and even provide loans of their own! Check out their website at and see if they can answer any of your loan questions!

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Applying for a Loan

How to Get a Loan for a Clothing Brand

Now that you have done your homework and determined how much you can pay and how long you need to pay it back, your next step is to actually apply for the loan. Before you can apply for the loan, you’ll need to get a few ducks in a row. Applying for a business loan is different from applying for a car or home loan. Many lenders will require you to have a business name, a tax ID and an address (if applicable) before you can apply. Some of them will also require you to have a business plan or proposal ready so they can see where you plan on spending the money you are taking out. They want to make sure they are making a sound investment when they approve a business loan, and feel secure that the money they are giving you will be paid back on time.

Be sure to have a strong business proposal written before filling out a loan application. List out all of your expenses, and have a plan for how your business is going to bring in a profit. Lenders want to see how you plan on growing your business and how you will make a profit. Show them you have a solid plan and how you will be carrying it out.

Next, you’ll have to fill out a loan application listing your information – such as name, social security number, address, and financial information. They will also ask for proof of income and do a check on your credit score. Again, all this is to make sure you are a sound investment for them and that they will get their money paid back to them.

Be sure to have everything you need ready ahead of time to make sure that the process goes smoothly and you don’t have any delays.

In Conclusion

Taking out a loan can be a tricky and confusing process, but if you do your homework and understand what is required of you beforehand, it can be a straightforward process. Don’t let scary loan terms and big APR numbers scare you. Understand what you need to make your business succeed and make sure to have a strong business plan ready in order to ensure your chances of getting your loan approved. Good luck, and remember, if you have any questions, you have hundreds of resources at your disposal to help you out along the way!

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Frequently Asked Questions

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  1. What can I do to ensure my chances of getting approved for a loan?

A strong credit score can really go a long way in improving your chances of getting a loan. If you can, build up your credit in the months prior to applying for a loan. If you have any savings available, putting down a deposit up front that will go towards funding your business can also increase your chances of getting approved, as lenders will see that you have funds available to pay for part of it yourself. Lastly, like we talked about above, a strong business plan can show lenders that you have a plan on how your money will be spent and how you plan on bringing in a profit, so make sure you have a solid business plan in place.

  1. What should I include in my business plan?

Your business plan should include what materials you will be purchasing, how much money will go towards each area of expense, what your marketing plan is, how you plan on advertising, and how you plan on making a profit. Basically, a business plan should lay a solid foundation before you even get your business started. 

To learn more on how to plan your own clothing brand business click here!

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