As a small business owner, you dream of landing large orders that can take your business to the next level. However, those dreams can become nightmares when a large order comes through and you do not have the financial resources to pay for manufacturing and delivery. You need access to cash quickly or you risk losing the order and possibly jeopardizing the customer relationship.
Many fast-growing businesses experience periods where sales outpace incoming revenues, leaving them without enough capital on hand to cover operating expenses or new orders. This can happen for any number of reasons, such as cash flow issues or lack of credit from suppliers.
Manufacturers and distributors who find themselves in this situation often turn to Summit Financial Resources. As an add-on to our Asset-Based Lending or Invoice Factoring programs, we will work with you to finance the purchase order (PO). This allows you to cover the cost of manufacturing and shipping a product or delivering a service instead of missing the opportunity to land a big sale.
The Power of Partnership
Through our PO financing program, we work with a specialized lender, such as King Trade Capital (KTC), to pay the supplier on your behalf. KTC partners with asset based lenders like Summit Financial Resources to help turn purchase orders and contracts into profits, providing up to 100 percent of the capital needed to fill a specific order. This helps to ensure timely deliveries to customers and gives you the ability to buy inventory and grow sales without being limited by existing capital or increasing your business debt.
Much like Summit Financial Resources’ Invoice Factoring program, PO financing allows you to cover the costs of doing business by putting your accounts receivable to work. You receive the value of existing purchase orders or contracts in advance without having to wait for your customers to pay.
The Funding to Fill Your Largest Orders
This type of financing is available to startups, provided the business’ management team has industry experience and a track record of fulfilling orders. It is also a viable option if your credit is not stellar. The lender evaluates the credit rating of your customer, not your company, so they are often willing to finance a transaction provided your customer is reliable.
If your business is dealing with new customers or suppliers, you may not be a good candidate for purchase order financing. Because the lender’s decision is primarily based on the financial strength and creditworthiness of the company who has placed an order, your customer must be well established. Your supplier must also have a proven track record of producing and delivering goods on time.
When sales outpace your cash flow, consider using PO financing to quickly access funds to satisfy larger-than-usual orders without depleting working capital or tying up capital you don’t have. In this economy, receiving an advance that is based on your company’s assets makes good business sense. Find out how Summit Financial Resources can provide the liquidity to help you increase your profits and your market share.
Purchase Order financing is a few clicks away.
Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.