Purchase Order Financing Blog

A new breed of entrepreneur has developed in this challenging economy, the online government contract bidder. It’s the lure of easy money, good credit and high dollar transactions. As the old saying goes, “If it were that easy everyone would be doing it.”

Many different laws and rules are specific to each government body. Federal contracts are arduous and very process specific. Working with state and local governments can be very challenging, even requiring additional procedures beyond those of federal contracts. We offer a variety of PO funding programs tailored to government contractors and vendors. We work with you step by step and share our years of knowledge and experience dealing with financing government contracts.

So be prepared! Partner with a government purchase order financing company with experience funding at all levels of state and federal government. Learn the challenges, along with our creative solutions prior to winning a government bid. Because you may not have time after the fact to learn process or even worse educate your funder on it as well.

Visit PO Financing on Twitter for all the latest updates. We look forward to talking with you soon!

Learn More

Whether you are new to PO Financing or not, you may benefit from some of our recent articles including:

• Apparel Purchase Order Financing

• What is purchase order financing

The world is a dynamic environment. Like fashion, economies change, and not always for the better. The financial crisis is still impacting small businesses rather aggressively. Banks are not lending. Many commercial finance companies view the clothing world as trendy and risky. Where are apparel companies to turn for financial support?

Purchase Order Funding looks to the credit worthiness (and good fashion sense) of your customer. We work with your manufacturer to get your garments produced on time. We then work with your customers to ensure payment of the invoice. Through our customized apparel PO financing programs we are there to support your sales success with our financial strength. We rely on your fashion sense, you rely on our financial sense.

PurchaseOrderFinancing.com also can factor apparel accounts receivables. Since we do both sides of a purchase order transaction, we gladly welcome the opportunity to service your accounts receivables financing and factoring needs.

How it works

Purchase order financing is a turnkey financing solution to get your goods produced, delivered and paid by your customer. You provide a valid purchase order with a credit worthy customer and the expertise to manage the process. We provide payment to your supplier, thus allowing your goods to be produced and shipped. Payment is typically completed through issuing letters of credit. We continue to work with you through the collection of the invoice. Our goal is to make the transaction as smooth as silk.

Further Reading

New to PO financing? Check out some of our recent articles to get up to speed:

• Purchase order financing and Letters of Credit

• What is purchase order financing

Times are tough and money’s tight. Banks are still virtually “shut down”. But there is a way for businesses to get money, and grow. Purchase order financing is not difficult to obtain, even in difficult economic conditions, because it is based on the promise of a sale.

The problem it solves is one of timing: how do you pay a supplier for goods or raw materials before your customer pays you for your finished product? Through one of our purchase order finance programs we can issue a letter of credit to your supplier guaranteeing payment. You do your work, and ship the finished product to your customer, often a retailer. When they make their payment, you receive all but a small percentage that the financier earns for making the entire arrangement possible. Everybody wins.

It works because it is supported by the credit and finances of the end customer, not you or your supplier. So as a small company, you are not excluded from doing business with much larger ones. In fact, purchase order finance can provide virtually unlimited amounts of working capital, as long as the purchase orders are from creditworthy and reliable companies or government entities. The potential to grow your business is there, even in today’s tough economy.

We provide domestic and international purchase order financing to a variety of industries including: food, hardware, electronics, apparel, sporting goods, furniture and housewares. In some cases our fast financing programs can provide the funding in as little as 14 days of your initial call. Contact us today to learn more about us and what PO funding can do for your business.

(Photo Credit: fabbio)

As a business owner, the worst feeling is turning down a big order. I put together a couple of scenarios to illustrate how you could avoid that in the future.

Scenario One: A new, start-up business gets its first big order. Thoughts of profits, new supplies and equipment, and future expansion come immediately to mind. But reality sets in when the supplier needs payment up front, requiring cash that just isn’t there. And as a new business, neither has the credit history or banking support. The big order has to be refused.

Scenario Two: A well-established business - with decent capital and a good bank - gets a huge order, the biggest in its history. Too big for its existing line of credit. Opportunity missed.

The solution to both situations is PO Financing (also called Purchase Order Funding). A third party will issue a Letter of Credit to your supplier, which serves as an advance on the the funds you have been promised in the form of your Purchase Order. Now you have the capital to fulfill your big order. What Purchase Order Financing does NOT do is give you any extra money, for, say, operating costs. You might receive somewhere between 45 and 65 percent of your expected invoice amount. And the financier earns a fee for its service, usually no more than 4%.

For new or established companies (US, Canada or International), Purchase Order Financing can help you accept larger orders, build your reputation, and grow your business. Is there any better feeling as a business owner?

(Photo Credit: Vramak)