Authored by Phil Cohen
Purchase order funding is when a factoring company issues a cash advance to a business for goods that have been ordered, but not delivered. This can be a solution for wholesale or distribution organizations that need immediate cash for supplies and other costs. Here are three reasons to consider purchase order funding for your business.
#1 Grow Your Business with PO Funding
With the help of PO funding, you can grow your business like never before. If you have turned down taking on larger contracts because of cash flow issues, PO funding can help. You can have the funds you need to fulfill orders, even if money is tight. You need working capital to run a business. By choosing PO funding, you will never have to be short on funds at crucial times.
#2 Your Credit is Not Considered
If your business has less-than-ideal credit or you have been denied loans in the past, you may think you will not qualify for PO funding. That is not the case. A factoring company will only consider the credit of the company paying for the purchase order. No matter your credit history, it will not have an impact on PO funding.
#3 The Application Process is Simple
Traditional bank loans have a complicated application process. You must fill out lengthy forms and provide detailed information about your company. On the other hand, it is simple to apply for PO funding. To qualify for PO funding, you must have a minimum gross transaction profit of at least 20%, have previously worked and conducted similar business with comparable clients, have a first transaction of no less than $100,000 and you must provide qualified purchase orders or letters of credit.
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