First Capital Bows Short-Term Loan Program
After news that CIT Group Inc. is having financial problems, the financial-services firm First Capital has developed a program to extend short-term loans to apparel manufacturers finding themselves in a bind.
Mark Sunshine, president and chief operating officer of First Capital, which factors small- and medium-sized apparel makers, said his company is setting up a program to give 30-day and 60-day loans to manufacturers in exchange for their uncommitted accounts receivables.
“We are finding that a number of companies are getting squeezed,” said Sunshine, who is also president and chief executive of First Capital’s sister company, Siemens First Capital. “What we are trying to do is provide liquidity to small companies in North America that would have trouble meeting their obligations.”
First Capital, based in West Palm Beach, Fla., is starting an emergency-liquidity program with short-form contracts for 30 and 60 days. “If companies want to enter into a more-permanent relationship, that is great. If they want to go somewhere else, that’s fine,” Sunshine said.
Credit for garment makers that have their accounts receivables bought by factors are finding tight conditions in the lending market. On March 20, New York–based CIT, the largest factor in the United States and the No. 1 factor to manufacturers in California, had to draw on its entire $7.3 billion in emergency credit lines to pay debt maturing this year. The company also said it may have to sell some of its nonstrategic assets or business lines to help raise cash. The news has created a stir in the apparel industry, which counts on CIT to buy its accounts receivables and keep them liquid.
First Capital has offices in downtown Los Angeles and can be contacted at (213) 996-2610. —Deborah Belgum
