What business owner doesn’t want to save money wisely? What business owner doesn’t need occasional financing to drive ongoing business operations? One excellent solution is purchase order financing. Purchase order financing can cover temporary gaps in cash flow, thus saving money for successful business operations.
Why Businesses Use Purchase Order Financing
Purchase order financing can be used to cover cash flow gaps, finance seasonal sales spikes when cash is not adequate, fulfill large orders, and maintain good customer relationships by not failing to meet orders.
Who Uses Purchase Order Financing?
A wide array of business types use purchase order financing including distributors, resellers, wholesalers, outsourcers, businesses with widely varying seasonal sales patterns, and businesses who face cash flow challenges in fulfilling orders.
This financing approach can be used for many purposes including purchasing new equipment, purchasing additional inventory, staying competitive, and buying materials to deliver specific projects.
How Does Purchase Order Financing Work?
Purchase order financing is simply an arrangement where a third party provides enough money to fund a customer’s purchase order. The financing company essentially buys the purchase order, provides the money to the business seeking the funds, and then the financing company collects the payment directly from the customer.
Here’s How Purchase Order Financing Works:
• A company receives a purchase order specifying the specific goods and quantity that they want to purchase.
• Your supplier estimates the costs of goods needed to fulfill the customer’s order. You then determine the need for additional funding.
• You apply for purchase order financing with a third-party lender.
• Your supplier gets paid.
• Your supplier delivers the required goods to the customer.
• You invoice your customer.
• When the customer pays the invoice, they forward the payment to the financing company directly.
• The financing company deducts their fees and forwards the balance to you.
Seek Experienced Funding Assistance
Contact WCK Financial Lending LLC, based in Los Angeles, CA to help bring your business dreams to reality. We offer great financing solutions to meet your purchase, refinance or equity loan needs.