Some businesses make fairly steady sales throughout the year. Other businesses, however, may get more orders during certain times of the year. If you belong to this kind of industry, then it means that your working capital needs are filled with peaks and valleys. Sometimes you don’t need much, but during the holidays your cash reserves may be stretched beyond what it can adequately cover. But with the help of large holiday purchase order finance companies, you can still cover all your purchase orders anyway.
How Holiday Purchase Order Financing Works
Without purchase order financial assistance from a finance company, large volume purchase orders are virtually impossible for you to fulfill. After all, your cash reserves may not be enough. Without help, you’ll need to have to reject some of the purchase orders, and that means you’re cutting your business off from excellent opportunities to make large amounts of profit.
With a large purchase order, your finance provider can give you the money you need in order to pay for supplies and other expenses and meet payroll for your employees. You can get as much as half or even 75% of the value of the purchase order.
Benefits of Purchase Order Financing
If you know that your company makes a lot of money during the holidays, then it’s your responsibility to consolidate your cash reserves to meet the expected increase in orders. There may be several reasons why you have failed to do so. Perhaps there was an emergency expense or opportunity earlier, or maybe the increase in orders was greater than you anticipated.
Regardless of the reason, you have to face the reality of your situation. And that’s why you need to consider purchase order financing for this emergency. There are several benefits you can get:
- You only get the money when you’re sure there is a need for it. The money you get depends on the size and number of the purchase orders you receive during this holiday season.
- The application process for this type of funding is easier to get, and the setup is much faster to arrange. With bank loans, the application process is terribly time-consuming. What’s more, you’re not even sure of getting the loan in the first place because banks are more reluctant to lend money to many small businesses.
- With this form of assistance, you can get working capital for every type of large order you get. The lack of money won’t be a hindrance. Only your hard work and your abilities will determine if you can fulfill an order or not. This way, you have an excellent chance of making up for all the lean days during the rest of the year.
With some companies, a large purchase order essentially means a lost opportunity because of their inability to come up with the cash to buy materials and pay for manpower. But with large holiday purchase order finance, each large purchase order means another opportunity for your company to make a lot of profit.