As business practices evolve, especially due to the stresses put on the economy by the COVID-19 pandemic, many smaller firms, and entrepreneurial start-ups are turning to alternative financing options to obtain the working capital that they need. One such alternative finance option is Purchase Order Financing.
Purchase Order Financing Defined
Simply stated, purchase order financing (also known as PO financing) is a cash-flow option for businesses that need capital to complete customer orders. For many smaller firms that receive sudden large orders, there may not be enough money to pay for order fulfillment. When working with a financing company that provides PO financing, you can receive speedy funding immediately upon receiving a valid purchase order from your client. Purchase order financing gives you the ability to have goods available for your clients from your sources even before generating an invoice.
PO financing is particularly suitable to those businesses that sell finished products that they obtain from primary sources. Resellers, importers, warehousers, B2B firms are but a few of the enterprises that may benefit from this type of financing.
Advantages of Purchase Order Financing
PO financing is not the same as a loan. You don’t have to pay it back! Additionally, it enables you to fulfill large orders, take on new clients and grow your business. PO financing is a non-recourse transaction: Meaning that you are not responsible for the risk in the case that your client doesn’t pay for the goods they receive. Instead, the financing company takes on that risk.
Connect with Progressive Capital Funding
Here at Progressive Capital Funding, we believe in small businesses and the solutions to their financing needs. Call us today to learn more about our purchase order financing solutions. At Progressive Capital, our job is to provide your business the means to grow and thrive.