|
How can the Cash Flow of a business be improved using Purchase Orders?
When a business receives a
Purchase Order from a credit-worthy customer, the business needs to purchase either the merchandise or the raw materials to be manufactured, before it can deliver the end product.
This Purchase Order not only implies future profits for the business, but generates a need for cash to buy the inventory with.
This Purchase Order is a strong asset for your company.
Financing, using the Purchase Order as collateral, enables the business to have a sufficient cash flow to produce the inventory. It enables your company to have access to additional capital -- secured by your accounts receivables and inventory.
Purchase Order Financing:
-
Is Short Term Funding
-
Entails issuing Letters of Credit, or
-
Providing funds from other sources that will allow clients to secure the inventory they need in order to fill their customer’s orders.
-
Keeps your business moving forward
-
Enhances your Cash Flow
What are specific uses of Purchase Order Financing?
-
Securing payment to a third-party supplier for finished goods that will be shipped directly to the end customer
-
Paying job-specific suppliers for raw materials
-
Paying job-specific labor
-
Paying for packaging, shipping costs, duties and inspections
Who is Eligible for Purchase Order
Financing?
NowFinancing.com will consider funding companies with a good track record of producing goods. If your company is young or a start-up, the company management must have a proven track record.
Our programs finance Purchase Orders for all types of transactions, including:
-
U.S. suppliers to U.S. buyers
-
U.S. suppliers to foreign buyers
-
Foreign suppliers to U.S. buyers
-
Foreign suppliers to foreign buyers
Do you lump Purchase Orders together?
Every Purchase Order transaction stands on its own merit.
We look at:
-
Your business history
-
The credit-worthiness of your buyer
-
The ability of your supplier to provide the goods
-
Will the transaction be profitable for all of the parties
Why do your current clients use your services?
-
They have insufficient Capital
-
The company has solid export/import or domestic sales, but does not have the working capital to complete the transaction or to continue to grow
-
Lack of international expertise
-
The company does not have the expertise and experience to structure and complete the import or export properly. Even established international clients use our expertise to make their transactions safer
-
The transfer of Foreign Risk
-
The clients and/or clients’ vendor (on exports) transfer to our investors the risk of payment by the foreign buyer
-
To enhance profits!
-
Clients can grow more quickly by having the capital available to do more business
-
Clients brokering good can become principals, thus increasing their margins
-
Clients can expand their margins, save on various costs and increase the supplier credit extended to them
-
Retention of Equity in a fast growing company maintains stability
-
The balance sheet or collateral of many companies will not support sufficient borrowing under the strict
rules and regulations of commercial banks. When the banks cannot finance, then Purchase Order Financing provides the business with working capital
-
Through other sources, a company would often have to give away a high percentage of its equity in order to obtain the requisite cash flow.
How Can I Obtain Purchase Order Financing?
The advance amounts and fees vary depending on each situation. Typically, every transaction will stand on its own, based on business history, credit worthiness, the ability of the supplier to provide the goods or services, profit margins high enough to absorb the funding costs and the transaction size.
Please view and print our Purchase Order Funding Application Form:
If you think Purchase Order Financing can enhance your Cash Flow, or if you feel there are other ways Purchase Order Financing would benefit your business, e-mail us at
CashFlow@NowFinancing.com.
There’s never an obligation! We want to give you honest, up-front, one-on-one answers and service.
A more detailed explanation of
Factoring is provided in the book,
The Entrepreneur’s Guide to Prosperity -- Financing Your Small Business, by Morris
Bocian. |
