- August 26, 2016
- Posted by: Admin
- Category: Business credit, Finance & accounting
Do you own a startup and want to initiate growth by taking on larger orders but lack the funds to do so? If so, then you may want to look into purchase order (PO) financing. This type of financing, which is transaction based and different from a traditional loan, may allow you to secure enough cash to fill a large order, make a greater profit, and grow your business in a way you have always wanted.
How Can Purchase Order Financing Help Fill Large Orders?
Because purchase order financing is not a loan, you will not have to be concerned with monthly payments. Instead, a purchase order lender verifies that your customer has a good credit rating and a history of prompt payment, supplies you with the funds you need to fill a large order and then collects the money from the customer after they receive the order. As a result, you may be able to secure 100% of the money you need to fill a large order without having to be concerned about opening a new line of credit or taking out a large bank loan. This kind of financing is especially helpful if a customer puts in a large order during a time when cash is in short supply.
Taking on Larger Orders Grows Your Business
PO financing may be a viable tool for growing your business because it can help you take on larger orders that you would not be able to handle otherwise. For example, if you are currently using a large chunk of your profits on company growth, securing purchasing order financing would allow you to leave that money where it is doing the most good while being able to fill large customer orders at the same time. When you can grow your business and keep customers who request large orders satisfied so that they return, you may soon be able to expand into a larger market.
Fulfilling Large Orders Increases Customer Confidence
Securing PO financing will give you the confidence you need to fill large orders. When companies come to you with a big order, you will be able to accept and fill it without having to pause and wonder if you have that financial means to back it up. When large transactions go smoothly, the customer is sure to return and tell others as well, increasing your customer base.
PO financing is a highly viable tool for growing your business. While it may not be the right choice for every situation, it may be used as a means to take on large orders, which can lead to new and exciting business opportunities.