Purchase orders are basically a contract between a business and a customer that outlines the terms of a sale. The business agrees to perform services or manufacture a specified number of products for an agreed upon price and the customer agrees to pay. And, while this is a great way to protect yourself from the possibility of non-payment, the issue is that a purchase order, or PO, means that the business has to perform the services or produce the goods prior to being paid. This can really put a dent in a company’s bank account.
The good news is that there is a way for businesses in any financial position to be able to accept the orders that will help them make their businesses successful and increase market share without having to go into debt or to put personal money on the line: Purchase Orders Financing.
Purchase Order funding offers many benefits over traditional bank loans. Some of these benefits include:
Purchase Order Financing is Not a Loan
First and foremost, PO financing isn’t a loan. There is no need for you or your business to have good credit. You don’t have to be in business for a period of time and you don’t even have to have business assets. Purchase order funding looks at the creditworthiness of your customers in order to determine what the face value of your purchase orders are. There is no repayment obligation, no interest or fees to pay and no lengthy qualifying process. This makes it a very attractive option for small businesses, startup companies and businesses in industries that typically are shunned by more conservative banks.
Purchase Order Financing Pays Your Supplier
The main reason many companies have to turn away orders is an inability to pay their suppliers for the materials it will take to fulfil the orders. PO financing eliminates this issue because you can turn it into useable cash quickly. With PO financing, you can not only pay for your materials, you can also pay for the labor it costs to get the orders filled and shipped.
Purchase Order Financing Allows you to Take on Big Jobs
Smaller companies who want to go big time understand that in order to do so, they need to be able to do two things: allow bigger customers to pay for their orders at a later date and take on larger orders. Both of these things require your company to have money in the bank to cover the bills before the payments begin coming in. PO financing bridges the gap for small businesses and allows them to take on the big jobs they need in order to grow their businesses without going into debt or jeopardizing personal money.
Purchase Order Financing Includes Collections
One of the worst things that businesses who sell goods and services on credit face is customers that don’t pay on time. As a matter of fact, many business owners find that trying to collect from unsympathetic customers takes up a big portion of their days. With PO financing, you no longer have to worry about the collection of payment from the customer. You get your money up front and the financing company is left with the task of collecting the balance in full.
Universal Funding offers po funding,a viable way for businesses of all shapes and sizes to obtain the cash they need to expand their businesses and accept new orders.