Purchase Order Loans to grow your business
Purchase Order (PO) Financing and purchase order loans have become a more popular tool for businesses to raise capital in the past few years due to more restrictive bank lending and the lack of venture capital available to early growth stage companies.
Typically, the types of companies that pursue a Purchase Order Loan are product manufacturers or wholesalers delivering goods to customers, such as national retailers or government agencies.
Benefits of Purchase Order Financing
The Benefits of Purchase Order Finance:
- The ability to buy inventory and grow sales without being limited by existing capital.
- Allows companies to grow without increased bank debt or selling equity.
- Helps ensure timely deliveries to customers.
- Increase market share.
- Allows companies to make larger profits by fulfilling larger orders.
- Fast flexible funding.
- Provides overseas manufacturers assurance to start production of goods.
- Helps companies in a turnaround.
- Helps when seasonal sales spikes strain cash flow.
The types of companies that benefit from purchase order loans include:
- Brokers and sole source contractors
- Suppliers and resellers to government agencies
- Other fast growing businesses
How Does It Work?
With a Purchase Order loan, there is a rate based on funds deployed, with no long-term contract. When your business receives a large order, but lacks the cash required to fill the contract, a PO lender can investigate the credit history of your customer – not the history of your business – in order to determine if you qualify for a Purchase Order loan.
If your customer is a viable entity and the transaction is sound, approval for a PO loan is likely. Then, when the contract is filled and the lender is paid, the remaining profits benefit your business. It’s that simple!
If you feel like your company can benefit from a purchase order loan, Cap4Growth can help. The first step in securing funds is speaking to one of our PO experts to see if your business qualifies for this type of financing. After a brief interview, and some financial information, we can get you a term sheet to see if Purchase Order Financing meets your business needs.