Purchase order financing is a creative business transaction which can help a business order acquire expensive raw materials in order to fulfill large customer orders. When you don’t really have the capital on hand to purchase those raw materials from a supplier, you wouldn’t ordinarily be able to accept the customer order. However, with the help of an alternative lender, those materials can be purchased and you can fulfill the order, so that your company has a chance to take on larger orders and grow in the process. Here are some other advantages of using purchase order financing.
Purchase Order Loans Can Be Scaled
Purchase order loans work very well for startup companies and mid-sized businesses because they can scale up or down during any given fiscal period to stay in sync with your desired business size. This can be advantageous because you don’t want to take on too much growth in one big spurt, and scaling will allow you to manage your growth so that it becomes a stable process that can be supported.
Retain Your Equity
Once a purchase order loan transaction has been completed, you won’t have to relinquish any amount of equity in your business. For a startup business where growth is especially critical, it’s essential to maintain all equity within your business model, so that you can steadily progress toward the growth that you had in mind.
PO Loans Allow You to Be Proactive Rather Than Reactive
When you make use of purchase order loans, you will be able to build up inventory in your warehouse, so that you’ll be able to take on a number of new projects. This means you won’t have to turn down business from clients because you lack the supplies to build finished goods they want. This in turn will promote more growth for your business, because your proactive approach has positioned you to take on more and bigger orders.
Interested in Purchase Order Financing?
We can help you get started with purchase order financing, so you can realize some of its many benefits. Contact us at Prosper Lending Firm, so we can discuss some details of how it could work for you.