Accounts Receivable Financing
Accounts receivables financing allows your business to access a revolving line of credit based on the value of your outstandidng receivables. Our program offers flexible repayment terms, have low minimum requirements to qualify, and can get your business funded as soon as the same day.
Business Line of Credit
A business line of credit is a great financing solution even if you already have access to capital for a purchase order, because of its flexibility in solving short ter cash flow needs. The best business lines of credit are available to borrowers quickly, cary no fees if they are unused, and can be a terrific solution for working capital expenses like payroll or inventory.
Short Term Business LoanShort term business loans offer borrowers a financing solution with a fixed repayment term and predictable costs for larger projects that require a lump sum of capital. There are several lenders that offer these loans, but the best short term business loans can get your business fundeed in one day have low minimum requirements, and offer flexible repayment terms that help you managte your cash flow.
Purchase Order Financing Frequently Asked Questions (FAQs)
The method used by Purchase Order financing companies to pay suppliers varies by lender and includes a letter of credit, wire transer, and check. Every lender and supplier prefers a method of payment, and lenders are typically flexible, depending on the needs of the business and what it takes to get the deal done.
Can startups qualify for purchase order funding?
Purchase Order funding is one of the few types of financing for which startups can qualify. However, keep in mind that if you don't have an established history with the supplier, it will be more difficult to get access to capital. The exception to this made by some lenders is if you have extensive industry experience.
Is purchase order funding available in all industries?
There are few restrictions for businesses that can qualify for purchase order funding. These are general restrictions such as nonprofit organizations or institution in the gambling business. It's needed also means you're not paying interest on unused funds.
* Frees up cash flow for reinvestment in the business: If a business uses its own capital to fund the manufacture and delivery of goods and extends terms up to 90 days to a customer, then its money is unavailable for up to six months. Freeing up this money can help businesses hire new employees and take on more customers.
Cons of Purchase Order Financing
Can take a lonetime to get funding: Funding a purchase order typically takes two weeks. However, if your transaction requires multiple suppliers or international shipping methods, it can take up to a month to get the funding needed. This makes it important to plan to get funding in time or work with a fast business loan provider like, Graco Commercial Capital.
Isn't an option if you don't have credible suppliers and customers: While it isn't difficult to qualify for fuding compared to a traditional loan, the credibility of your customers and suupliers plays a large role in approvals. This is something business owners typically have little control over and can lead to lost funding opportunities.
Is less flexible than other financing alternatives: Purchase order financing is meant for funding purchase orders. Businesses can't use it to fund other business operations like payroll or rent, making it less flexible than some alternative forms of financing.
Your business can access a large amount of funding to fuel growth by financing purchase orders, but it will typically take at least two weeks to get funding. You also must depend on the credit worthiness and track record of your suppliers and customers to get approved. If your business doesn't need as much capital or needs funding sooner consider applying for an alternative to purchase order financing.
Alternatives to PO Financing
When considering financing a purchase order, it's important to explore alternatives in case you cannot qualify or need fuding that's more flexible. You can factor existing invoices if you have slow paying customers, access funding based on the value of receivable with accounts receivables financing, or get a short ter loan or line of credit to fill a working capital need.
Invoice factoring is a great alternative for businesses that have already delivered goods to their B2B or B2G customers and are waiting for them to pay an invoice. The best invoice factoring program at Graco Commercial Capital offers large maximum amounts, low rates, and a quick application process for funding.
Who Purchase Order Financing Is Best For
Purchase order financing is one of the best ways to finance growth for your business. If customer orders are outpacing your cash flow or your business is experiencing an unusual spike in demand, it's a great solution. You could also take advantage of Purchase Order Financing if you work with reliable suppliers and want to reduce the amount of capital tied up in shipping.
Purchase order financing is best for businesses that:
Have an unusual spike demand: If your business signed on a new distributor and demand for your product spiked, you'll need a financing solution. You don't want to risk losing a new distributor, and a traditional source of capital like a term loan may not be the best solution for a single large order.
Work with reliable suppliers: Purchase order financing companies send funds to your suppliers. Although every supplier makes errors from time to time, the more experienced your supplier is, the more likely you will get funding. This can free up capital for other investments in the business.
Are you unable to keep up with orders as a startup: New businesses are always on the brink of running out of cash. Taking advantage of PO Financing can be a low cost way ot fuel that growth while meeting customer demand.