Purchase order financing helps you to overcome the problem where you don’t have sufficient funding to purchase raw materials needed to fill a particularly large customer order. An alternative lender will provide the needed funding in order to pay for somewhere between 70% and 100% of the materials needed to fill that order, so your business can gain credibility with customers, and has the opportunity to grow in size.
Purchase order funding can be the ideal solution for many startups and small businesses because it can help you grow or contract in response to the prevailing business needs of the time. With no actual loans ever being taken, a business has no ongoing obligation to repay the money, and you can simply react to whatever level of business currently prevails.
Preparation for Growth
When a business has much of its capital tied up in other areas, a purchase order loan will allow you to restock your inventory and build it up in preparation for a whole slew of projects on the horizon. This means you won’t have to delay projects with clients and tell them that you need weeks or months to acquire inventory. Building up your inventory will prepare you for growth, rather than hoping for a business miracle to take place.
Equity Stays in Your Company
Purchase order funding does not require you to give up any equity in your company when the terms of the transaction have been completed. No cash or assets will have to be relinquished in order to fulfill the terms of the purchase order funding contract. This allows your company to keep its important assets and helps to spur growth for the future. When materials and supplies keep coming in at a steady rate, this will be a natural encouragement to business growth, and that valuable equity will always remain right where it belongs, in your company.
Looking to grow your business?
We may be able to help if you’re looking to grow your business and become more successful in your industry. Contact us at Purevue Capital, so we can discuss some options which may be of financial benefit to you.