Textile Finance (SIC 13100)

Trade and Stock Finance For Textile

Trade Finance Global / Finance Products / Textile Finance (SIC 13100)

What is Textile Trade Finance?

A recent spate of acquisitions and divestments playing out amongst the large global carpet manufacturing firms has played out against a backdrop of growing demand for the product from the household and commercial sectors. As order volumes rise and producers driving for efficiency become ever more specialised, Trade Finance Global can help firms manage the complex international transactions which underpin the production and sale of these textiles.

The Global Textile Trade

In recent years, the value of world textile exports has enjoyed steady if unspectacular growth. However, the production chains which service this demand continue to undergo change and consolidation. Though China, the EU and India remain the top three exporters of textiles, production and manufacture of products continues to shift towards South-East Asia and other developing economies, which have increasingly abandoned plans to invest in their own raw textile manufacturing capabilities and instead rely on imported products. These are largely obtained from China, which is shifting production away from apparel goods towards base textiles. China is therefore increasingly the primary source of textiles for the South-East Asian apparel-producing countries who subsequently manufacture and export finished products. However, demand from the automobile industry in developed economies has also seen carpet and industrial textile production lift in volume and value in the USA and the EU.

Conducting transactions across international borders can be daunting for relatively inexperienced textile traders, as the production, processing, customs and regulatory dimensions of products vary hugely between each one. Textile products and manufactured textiles can both often be subject to stringent tariffs, duties and quotas, as well as extensive customs checks, by economies seeking to protect their own manufacturing industries.  However, trade between countries is essential for textile producers to acquire the resources they require and traders to meet suppliers’ demand. TFG’s proven financial support structure for international traders can support these trade transactions.

Products financed

Key products financed include:

  • Woven fabrics (i.e. silk, cotton, wool)
  • Synthetic fabrics
  • Carpets
  • Rugs and other household textile products
  • Industrial textile products
Textile Producer – Finance Requirements
  • Your accounts receivable are lucrative and stable
  •  It is appropriate for your business to take on credit obligations
  •  A trusted buyer or seller has been identified for your proposed venture
How the transaction works

Trade financiers’ low capital requirements and flexible terms of repayment are designed for international textile producers to enable them to invest in ventures; pay suppliers up front for goods receivable; ship, receive and forward those goods to fulfil their orders; and then repay their trade finance from the profits in their accounts. Underpinned by private trade finance on flexible repayment terms, exporters can also then move textile goods through supply chains, processing plants and ports at speed, supported by a series of performance-based payment structures including performance bonds or bank payment obligations. When they arrive in the importers trade jurisdiction, specialist teams can also advise on appropriate transportation and warehousing solutions for textile products to mitigate operational and commercial risks to firms.

What is the SIC Code for Trade in Textiles?

Several SIC codes exist covering the different stages of the textile manufacturing process, and the nature of the product being produced.

13100   Preparation and spinning of textile fibres
13200   Weaving of textiles
13300   Finishing of textiles
13923   Manufacture of household textiles
13931   Manufacture of woven or tufted carpets and rugs
13939   Manufacture of other carpets and rugs
13960   Manufacture of other technical and industrial textiles
13990   Manufacture of other textiles n.e.c

Agents, wholesalers and retailers trading in textiles and related products are covered by separate codes and may require alternative trade finance support.

Full tariff schedules for woven fabrics of silkwoolcotton and synthetic textiles, and for carpetswoven fabric products and industrial textiles can all be found on gov.uk.

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Case Study

Carpet Trader, Textiles

A textile importer was struggling to find appropriate warehousing space for high-quality carpet textiles at key port locations, disrupting and delaying their supply chain at significant cost. TFG’s financing team was able to advise on appropriate warehousing and transportation solutions for a venture financed through lending secured to the importers extremely profitable accounts receivable, minimising these risks.


Get in touch with our finance experts. Enquire now.

First Name*

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Briefly, what type of stock or trade are you looking to finance?

(Marketing Terms can be found here)

First Name*

Last Name*

Your Organisation*

How much trade finance are you seeking?*

Your Email*

Telephone Number*

Briefly, what type of stock or trade are you looking to finance?

(Marketing Terms can be found here)

Benefits

  •  Access to a wide market of international suppliers
  •  Bring your products to new markets and customers
  •  Bespoke finance products to unlock capital for profitable trade ventures

 

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