How Purchase Order Financing Helps Startup Businesses Fulfill Large Customer Orders

A Large Customer Order?  Is It A  Blessing or Curse!

For many startup businesses, obtaining that first large retail order is a cause of celebration.  YES!  It’s a  confirmation that not only do you have a great product, but you now have a retailer eager to sell your product to their customers.  Unfortunately sometimes those orders come in and your business doesn’t have enough working capital to fulfill the order.  The up front cost to manufacture the product at that large of a scale is prohibitive.  Now you need to find a bank willing to provide you with a large short term loan.  As a startup business, you know that the banks aren’t eager to give large loans to new businesses.

So what do you do?  Tell them, thanks for the large order, but no thanks?  We can’t fulfill them?  Or hey, can you make your order smaller ?  How will that make your business look? Customers who were refused once may never call you again to request another order.  So  do you gamble it all and deplete your working capital, forgetting about your other obligations such as, payroll, taxes, utilities, rent….  And hope that they pay you immediately after receiving the merchandise? Do you call family and friends asking for a loan?

That’s where purchase order financing steps in.

Purchase Order Financing and Your Business

Why is purchase order financing so attractive to startup businesses ?  For the same reason businesses with credit problems turn to PO financing.  While a bank looks at your company’s finances, purchase order financing companies look at your customers financial strength.  So it doesn’t matter if you are a brand new business with no business credit, and weak financials.  Or even a well established business with bad credit.  If your clients are credit worthy, purchase order financing can help you fulfill their orders. Read continue

Author: I. Taylor

Original Sources: http://www.startupbusinessloans.com/what-is-purchase-order-financing