One of CIT Group’s specialties is providing financing for apparel and furniture manufacturers and other suppliers with a long wait from procurement of supplies to manufacturing to delivery to retailers until invoice payment by retailers. Cash flow and working capital keeps the supply chain flowing. There is much anxiety on the part of retailers about an interruption in the supply chain that would come about as a result of an interruption in cash flow along the value chain. To the suppliers and manufacturers, their very business survival is at risk. The concern for many is how they can continue to meet payroll.The big year end retail season is fast approaching. The apparel and retail industry is generally one season ahead of the actual calendar season. But months earlier, they are already planning and strategizing on how to best navigate the Christmas holiday. That’s when the majority of retail sales revenue is generated. Now is the time. And the supply chain and value chain needs to be functioning. Business cash and cash flow is crucial.What is Factoring?Receivables are business assets, assets which businesses can use to get cash and working capital. With factoring or accounts receivable financing, the business owner sells customer invoices in exchange for cash advance in as little as 24 hours. This is a big improvement over the 60 to 90 days that retail industry suppliers must wait to get paid. Everyone in the supply chain has already had to have sufficient cash flow and working capital to carry them through until their invoices are generated. Then it could be another 60 to 90 days until there is an inflow of money to fuel continued operations.With accounts receivable financing or factoring the business gets qualified for cash advances by its customers. Factoring companies purchase business receivables in exchange for providing immediate cash to the business owner. As part of the factoring transaction, the factor or funder or funding source has to the right to receive the A/R invoice payment directly from the customer. After the customer pays the funder, the funding source then deducts the discount fee and remits the balance of the A/R money to the business owner.The Good NewsThe cash flow industry is in the business of providing cash advances against future assets and cash flows. Invoice or Receivable Factoring is the original and probably the largest cash flow product. While banks are tightening their money and lending criteria, there is still plenty of money in the cash flow industry. Alternate ways of financing business must be considered as the US Government money dries up and the national deficit and debt continues to rise. Not sure that the fiscally fit factoring companies could absorb $42 billion worth of factoring business. Hopefully that theory won’t be tested. CIT Group, Inc is being rescued by private financing.