Steady cash flow is a primary concern for all small businesses. It’s disheartening to receive a large order and then be unable to fulfill it due to insufficient funding. Purchase order financing provides you with the working capital to take advantage of opportunities for growth. Here’s how this form of funding can boost your cash flow and help your business thrive.
How Purchase Order Financing Works
Purchase orders are requests from your clients for products. The orders generally specify the quantity of products as well as the terms of payment and delivery. Sometimes your company may lack sufficient cash on hand for the materials or items to fulfill the order. That’s where purchase order financing comes in. Rather than lose the order, you apply to a funding company for a purchase order loan. Once your application is accepted, you quickly receive the cash for the supplies or items that you need to handle the order.
Who Can Benefit From Purchase Order Financing
Most small businesses can strengthen their cash flow with purchase order financing, even those that are just starting up or those with less than stellar credit ratings. Purchase order loans are based on your clients’ creditworthiness, not your own. This form of funding is ideal for seasonal businesses, companies with rapidly increasing sales, and businesses that are launching new products.
The Benefits of Purchase Order Financing
Purchase order financing boosts the productivity and growth of your business by making it possible for you to take on any size of order, whether you have the immediate cash to handle it or not. Additionally, funding agreements are flexible and can be adjusted to compensate for seasonal needs and market fluctuations. You’ll find you have more cash on hand to hire more employees, upgrade technology, or develop new products.
For more advice on using purchase order financing to improve cash flow, get in touch with Skybridge Capital Group.