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How to start a Textile Recycling Business?

Published on 8th March 2019

According to Clothes Aid, Brits send 350,000 tons of used but wearable clothing to landfills every single year. That’s equivalent to £3 billion going to waste and a lost opportunity to reduce our carbon, water and waste footprint by as much as 20%. An issue which isn’t being helped on account of the growing phenomenon of fast fashion. However, it doesn’t need to be this way. You can play a role in turning this around, whilst also generating an income, by starting your own textile recycling business. So if you’re interested in giving nature a helping hand and protecting our environment, here’s how to start a textile recycling business and succeed.

What is a textile recycling business?

Simply put, a textile recycling business revolves around the process of recycling used or unwanted textiles so that the raw material which comprises them can be recovered. From here, you can then sell these materials in order to generate a reliable income, resupplying the fashion industry in the process. As such, you have every chance of turning this eco-friendly initiative into a viable business model, providing you know how.

Starting your own textile recycling business? Need help gaining access to additional funds? Apply for New Business Finance and learn more about how your business could benefit.

How can I set up a textile recycling business?

As well as the textiles that make it to landfills, we also send over 700,000 tons of unwanted clothing to recycling centres, textile banks and charities, so the opportunity to generate an income whilst being environmentally responsible is out there. But where should you begin? Like with any business venture, getting your idea off the ground and operational can be daunting. Yet if this is an area that you passionate about, here are some of the questions you need to answer.

How are you going to collect unwanted textiles?

For your textile recycling business to be sustainable, you must ensure that have a steady supply of unwanted textiles being collected. As such, you’ll need to call upon the help of your local community, making it as convenient as possible for them to discard unwanted clothing. One way of achieving this is by seeking permission to place textile banks in car parks or along high streets. Plus, you’ll need to factor into your decision how much it may cost to have any deposited clothing transported back to your business.

Who will you pass the recycled material on to?

Once the clothing that’s been collected has been converted back into raw materials such as cloth, yarn or wool, you need to identify a buyer. Since you’ll be working with the fashion industry, this could be a textile factory, fashion retailers, tailors or even arts and crafts shops. Just remember to consider how you’ll charge for each bale and make certain it’s able to support your operating costs.

What equipment does your textile recycling business require?

In addition, you also need to think about what equipment your textile recycling business requires to operate efficiently. However, this also depends on the types of materials you’ve managed to collect as well. As such, you’ll need equipment to sort the incoming textiles before dispensing to a specific textile recycling machine that will shred and separate it into fibres. But with materials such as polyester, you’ll need another type of machine which will granulate the item instead. Therefore, you’ll likely need to have access to multiple recycling machines in order to operate.

How do you intend to finance your business’ development?

Naturally, managing a recycling business is going to incur a variety of expenses such as the cost of equipment, chemicals, site rental, transport, energy and staff wages. Therefore, it’s essential that you create an effective financial plan that will support your startup capital requirements and working capital expenses. But being a start-up, you may not qualify for funding from traditional financial institutions due to possessing a limited trading history. Yet you could gain the support you require by applying for local grant schemes, crowdfunding or Peer-to-Peer Lending (P2P).

  • Grants: These are schemes that are usually offered by Government, local authorities, corporate entities or private individuals for a specific purpose. Plus, if successful, you generally aren’t required to repay any of the funds your textile business might receive, making it a great source of free money. The issue, however, is that they’re highly sought after and you may be required to match the funding that’s on offer using your own capital. Therefore, to avoid wasting precious time, check whether your business is eligible and that it’s able to provide the amount of funding you require.  
  • Crowdfunding: Another way of raising funds for your new textile recycling business is by applying for Crowdfunding. This method works by using an online platform where you can express the benefits of your textile recycling business to a community of investors using various marketing tools such as blogs, posters, videos or live discussions. However, should they choose to do so, anything that you receive will come at the cost of shareholdings (equity) in your business.
  • Peer-to-Peer Lending: Meanwhile, if you’d rather retain the shareholdings in your business, you could instead apply for a short-term Peer-to-Peer (P2P) lending agreement. Similar to crowdfunding, this pathway involves you appealing the merits of your business to a community of online investors. The difference, however, is that’ll they pull their money together by joining a panel in order to offer your business a lump sum. This is then gradually repaid using a Fixed Monthly Repayment Scheme, plus interest across an agreed that could last up to 3 years. However, some Peer-to-Peer Lending platforms may offer 5-year agreements as well, possibly more.

Need help supporting the development of your textile recycling business?

Clothing waste is a hot topic and with thousands of tons of textile going to waste each year it’s easy to see why. So if you’re eager to make a difference, whilst also generating a reliable income, you might be thinking about starting your own textile recycling company. However, just like any business venture, it’s something that needs careful consideration and a realistic assessment of the challenges you may face. One of which concerns the matter of funding. Yet as your business develops, you could gain access to a new generation of business finance solutions through the Alternative Finance industry including Secured Business Loans, Merchant Cash Advance, Overdraft Replacement, Asset Finance and Asset Refinance. The only obstacle standing your way now is knowing which product to choose for your business, which is where we can help.

At Rangewell, we’ve mapped over 400 lenders to offer business owners like yourself an overview of more than 23,000 business finance products. Our services are completely free to use, plus we’ll also guide you through the application process. So if you’re looking to support the development of your textile recycling business, apply for New Business Finance today or find out more with Rangewell.


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David Harrison

David Harrison

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