4 Reasons Why Businesses Should Embrace Purchase Order Financing

Last Updated on September 18, 2017

Purchase order financing is one of the most innovative and advantageous business funding solutions available. Here are the 4 key reasons why this option is growing in popularity, and helping businesses of all sizes stay strong and successful:

embracing purchase order financing in 4 ways

4 Reasons to Embrace Purchase Order Financing

  1. Enables business to fill large orders: Many small businesses and mid-sized organizations get stuck in a vicious cycle: they don’t have enough working capital to fill a large and profitable order, and until they fill the order they won’t have enough working capital. That’s where purchase order financing enters the picture and ends the spiral — because it provides businesses with a rapid (more on this in a moment) cash infusion that is secured by the purchase order itself; not on existing collateral or high credit scores.
  2. Funds can be available within days: Banks loans can take months to process, which for most businesses is a non-starter — since if they don’t have the cash to fill a purchase order, then their customer will quickly become an ex-customer. Purchase order financing (or, invoice factoring) can be set-up quickly; often within a matter of days. What’s more, the cash is made available in a lump-sum amount vs. installments. As such, businesses can take advantage of volume purchase discounts, and negotiate more favorable terms with suppliers and vendors to increase their profit margin.
  3. There is no equity loss: Many business owners are understandably reluctant to raise funds by selling a part of their business; especially since investors and VCs will want very favorable terms given that they know the funds are essential. With purchase order financing, there is no equity loss whatsoever. Business owners retain full ownership of their business (or however much they had prior to receiving the funds).
  4. It scales with the business: The old saying “you have to spend money to make money” has a cousin: “when it rains, it pours.” Indeed, it is not uncommon for businesses that take advantage of purchase order financing to find that their well-earned reputation for delivering on-time generates even more purchase orders (from the same customers and from new customers). Purchase order financing can tightly scale with a business, and allow it to efficiently and quickly access more funds as the need arises. In other words: let it rain more purchase orders!

How to Apply for Purchase Order Financing

To learn more about purchase order financing, and to determine if it’s the right funding solution for your business, contact a live Advisor at (877) 482-3008 today for a free consultation.

Or, complete our 1-minute application online for a funding decision within 24 hours!

Learn More About Purchase Order Factoring in Your Free eBook

If you’re looking to read more about how business loans can provide your business an opportunity to grow, check out our latest eBook “7 Profitable Opportunities that You Could Miss Without Business Funding”:

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

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About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.