How much you know about Purchase Order Funding?

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10 Questions - Developed by: Sophie Morngan - Developed on: - 978 taken

Purchase order financing is a short-term commercial finance option that provides capital to pay suppliers in advance, so you don't have to deplete critical cash reserves. For more information visit: http://www.sterlingcommercialcredit.com/purchase-o rder.php

  • 1
    Purchase order financing allows businesses to leverage their purchase orders for cash (or credit) advances to their supplier.
  • 2
    PO financing gives companies the opportunity to grow their businesses and take on jobs even when cash is flowing.
  • 3
    Purchase order financing is a loan.
  • 4
    PO financing will pay for the needed materials; it is possible for companies to accept new business
  • 5
    PO Financing allows you to take on big jobs.
  • 6
    The purchase order finance company will not only advance you the money, they will also collect payment from your client. This eases your company’s burden. After they receive money from your client, they will send it you, minus any fees.
  • 7
    Purchase order financing doesn’t require the company that uses it to have excellent credit.
  • 8
    The PO financing company gets their money back from payment by your client. Loans can get very expensive, and if your company does not have great credit or is new, they can be very difficult to obtain. PO financing makes it unnecessary to take out a loan.
  • 9
    When a small business borrows money for purchase orders, it will pay the lender back after the customer pays it for the order. The purchase order financing company will make a margin on the transaction.
  • 10
    When a business gets in the habit of borrowing money for all of its purchase orders, getting out of this habit can be difficult. Some companies get into financial trouble by using this technique.

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