Several companies offer purchase order finance. It’s a natural part of doing business. There are a lot of companies that fill the role. It’s a potent financial tool.
For example, a supplier might want you to pay COD, and your customer might not be able to pay you for another one to two months. Simultaneously, shipping, packaging, and labor costs have to bet met. Purchase order finance services exist to make those deals not just available, but profitable as well.
You might have a confirmed order from a creditworthy customer, but you might not have the cash to fulfill it. That’s where a purchase order finance company comes into place. With purchase order finance, a company can send an advance of to 80% of the total buying cost to the supplier. They either pay the supplier, or they open up a credit line. You send the goods, and they send the invoice to the customer. They grab the invoice payment from the client, and pay the balance between the money paid to your supplier and the order value to you. They subtract any cost or fees of cash used, after the payment comes in.
Purchase order financing lets companies have a short-term solution for funding the inventory necessary to end sales transactions.
Purchase order finance programs are perfect for companies where the growth is in excess of the working capital available, or where seasonal sales spikes put a damper on cash flow, or where funding from the sources you’ve traditionally gotten it from is not available.
Targeted purchase order financing can help with a number of things like funding 100% of the inventory cost, solving cash flow problems, finding alternatives to risky advances, and obtaining transactional credit lines from $500,000 to $50,000,000, or greater.
Purchase order finance solutions are available to a number of different kinds of companies like manufacturers, assemblers, distributors, and importers. If you’re mulling over between different companies, try to choose one with a strong track record, work with companies who have requisite experience in a number of different industries and over a long period of time, and choose a company that knows your niche specialty best.
Purchase order finance companies that have provided financing to companies in a number of industries are going to be your best bet. If you’re not quite sure about companies to go with, choose the companies that are going to offer you the best chances of a sure deal with a bunch of experience in purchase order financing. That’s the only real way you can be sure that you’re going to be working with a company that truly knows what they’re doing. Check for a company with at least ten years of experience so you can be sure to get the security of financing that comes with a trustworthy, reliable company. If you’re unsure about the prospects of the company you’ve chosen, then investigate their rating with the BBB or third-party review companies. A lot of these companies are so big that they’re not going to have ratings on the BBB so look into B2B rating guides online instead.
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