Using Purchase Order Financing for Business Growth
Purchase order financing can be a terrific vehicle for achieving growth for your small business. If your business is in its early stages, and you’ve managed to handle all customer orders so far, you may be ready for that next big order which will send you to a new level. However, you may not exactly have the resources to acquire all the materials needed to fulfill that big order. This is where purchase order financing can make a huge difference for your company and can spur you on to that next level of growth.
How It Works
When you work with an alternative lender, the purchase order provided to you by a potential customer can serve as the basis for financing which would come from that lender, so all the materials can be purchased to build the needed products. The alternative lender would send a letter of credit directly to the vendors which you require raw materials from, in order to cover the cost of those raw materials.
You would then be able to build whatever finished goods are needed by your customer without having to worry about the cost of materials needed. Your customer would then pay the lender directly, and the lender would remit the balance to your company after having subtracted its fees for the financing service. The great thing about this is that your company would establish a reputation for handling larger orders, and being able to fulfill important customer orders. That may be all that’s necessary to thrust you into a new level of business, and experience real company growth.
Are You Considering PO Financing for Your Small Business?
Purchase order financing can be a great way for a company to take on larger projects and experience growth. If you’re considering PO financing, contact us at DrawBridge Capital, so we can consider some ways to make it work for your company.