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 funding 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.
- Purchase order financing is one of the best ways to finance growth for your business. If customer orders are out pacing 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 to fuel that growth while meeting customer demand.