Business owners are constantly on the lookout for new ways to improve their bottom line and bring in more customers. This can be challenging for smaller businesses, and many devote part of their budgets toward marketing and advertising in the hope of getting a few new customers. Instead of spending large sums of money, there is a simple solution which can help your business carve out a larger market share, without placing a strain on cash flow: Purchase Order Financing.
Why Use Purchase Order Financing?
Purchase order financing levels the playing field for smaller businesses, by providing funds to cover large orders. Typically, when an unusually large request comes through, a small business will have to take out a loan to cover the cost of production. Unfortunately, traditional bank loans take a while to arrange, which means businesses lose out on time-sensitive opportunities. Additionally, without the necessary funds, small businesses will usually lose out on a sale, and the customer will seek out competing companies with the resources to fill the request. Purchase order financing solves this equation.
How Purchase Order Financing Works
Purchase order financing is an advance in capital, which can be arranged quickly. The advance covers the cost of what your business needs to fill an unusually large order – whether it is purchasing more materials, hiring temporary employees, or anything required. This advance also means your business can keep up with regular orders, at the same time, so the potential loss of business is eliminated. Once the order is completed, and the customer pays in full, the purchase order financing is deducted from the payments, and the reminder is delivered as revenue.
Carving Out A Larger Market Share
By using purchase order financing, you are leveling the playing field. Your business will be able to take on customer requests that would normally go to larger businesses in the same industry. Also, by using this type of funding, the revenue gained from larger orders will provide the growth capital for your business to expand. This allows you to carve out a larger market share.
Purchase Order Financing Is Not A Loan
Purchase order financing does not place any debt on the balance sheets. This advance is paid for, in whole, by the end customer once the order is completed. This funding program is designed to help businesses grow and flourish, by removing the financial burden placed on them by traditional loans. If you would like to learn more about purchase order financing, or any of our other debt-free financing product, contact Eagle Business Credit today.