Working capital is the lifeblood of business health. Without it, your operations can grind to a halt and your customer orders may not be fulfilled. There may be times when there is not enough money available to cover the costs of doing business, especially if you are a small firm with a sudden onset of large orders.
For businesses that are involved with sales of finished products (e.g. B2B, reseller, online sales, import-export, etc.) purchase order financing may be just the ticket. In this type of financing, a finance company will pay you upfront cash to pay your suppliers for unfulfilled orders in return for the opportunity to collect on the invoices already issued.
Benefits of Purchase Order Financing
When you obtain funds through purchase order financing, you will accrue the following benefits, many of which cannot be found when using conventional loans:
Easy qualification. The financing company is more interested in the customer’s ability to pay than yours.
They are not a loan. They do not have to be paid back. The financing agent is in effect paid when you transfer the purchase orders to them.
It’s a Non-Recourse Transaction. In essence, this means that the financing firm absorbs the risk in the case that your customer does not pay. You are off the hood, so to speak.
Funding is flexible. Once you receive the working capital, use it any way you see fit.
If purchase order financing appeals to you, you will quickly find that there are many firms that offer this type of financing. Why not go with the best? We at Navigate Firm are a trusted leader in business and commercial financing options. Give us a call today to get the process started or to have any questions that you may have answered.