Most businesses have to be constantly concerned with maintaining positive cash flow because it is truly the lifeblood of any small business. This is easier said than done however because a number of situations tend to interrupt cash flow and leave your small business in dire straits. Purchase order financing can put cash in your hands quickly to overcome any discomfiture you might be feeling from having to pay business expenses, employee payroll, or rents and utilities.
What Is Purchase Order Financing?
Purchase order financing makes use of your purchase orders as a form of collateral so that an alternative lender can pay your suppliers directly, thus providing you with the materials you need to fulfill customer orders. This can help your business grow because you will be able to take on larger customer orders and fill them promptly.
Advantages of Purchase Order Financing
There are probably a lot of large business orders which you simply could not accept, simply because you lack the funds to purchase materials necessary for their completion. With purchase order financing, you don’t have to worry about materials purchasing, because an alternative lender would manage that for you, so you can go ahead and complete the order.
Another advantage of this kind of financial transaction is that approval is much more likely than if you were to apply for a loan at a bank. This is because approval is based much more on your suppliers’ credit-worthiness than on your own. There’s also a great deal of flexibility involved with purchase order financing, since it can continue to increase in volume for your company, as long as your customers continue to promptly pay their bills.
Would Purchase Order Financing Benefit Your Small Business?
If you have a high volume of credit card sales, chances are purchase order financing could be very beneficial for your small business. Contact us at Whitefish Funding to find out more about how this financial product can be a major help for your small business.