Everything You Need to Know About Purchase Order Financing

Key Points:

– Purchase order financing is a funding option for small businesses to cover the costs associated with starting a job or purchasing goods.
– It is especially useful for businesses that don’t have enough working capital to fulfill large orders.
– With purchase order financing, a finance company will pay the supplier directly, allowing the business to fulfill the order.
– The finance company will then collect payment from the customer, deduct their fees, and pay the remaining amount to the business.
– The fees for purchase order financing can vary, typically ranging from 1.5% to 6% of the total order amount.
– This type of financing is often used in industries such as manufacturing, distribution, and wholesale.

Closing Thoughts:

So, if your small business is struggling to fulfill large orders due to limited working capital, purchase order financing might just be the solution you’ve been looking for. It allows you to secure the necessary funds to start a job or purchase goods, without putting additional strain on your cash flow. Just remember to consider the fees involved and choose a reliable finance company to partner with. With purchase order financing, you can keep your business running smoothly and seize those lucrative opportunities that come your way. Happy financing!
Original article:https://smallbiztrends.com/2024/01/what-is-purchase-order-financing.html