24 Hours to Improving Purchase Order Financing
What is Purchase Order Finance ?
That's a common question from our clients who haven't fully understand the availability of P O financing and inventory finance in Canada. It's certainly an underutilized strategy when it comes to financing more sales when your firm has financial challenges .
Inventory is a key asset in any business , unless of course you're a service business. Turning over and funding tht inventory are key to the profits you generate from sales . So what then are the costs and options when it comes to dealing with purchase order financing companies?
Purchase Order Financing: A Killer Way to More Sales
More sales is always a balancing act in business ; no inventory or improper levels of products won't allow you to fill those large new orders and contracts. Excess or poor inventory can drain cash flow.
Both Canadian banks and independent commercial finance companies finance inventory needs. Commercial finance firms, non bank in nature are often best to finance inventory because it is their business to understand your products and services. That expertise translates into greater borrowing power !
Purchase Order Funding for Better Faster & More Sales
It is important to understand the key players in the Purchase Order funding cycle . Simply speaking they are your firm, the borrower, the finance company, your supplier/suppliers, and finally, you guessed it- your customers.
Specialized services exists for your orders and contracts . Firms who are generating new contracts and large orders have a challenge in financing them because cash flow is often limited. Therefore PO Funding is a way to finance your current growth.
This type of financing makes payments to your suppliers , allowing you to receive product and deliver services. Your receivables turn into cash and the cycle is complete.
Inventory and P O finance works best when there is a holistic approach to collateralizing the purchase order , the inventory, and then the receivable arising out of that order. Don't forget to also investigate the asset based non bank line of credit, which also allows you to finance all your ' current assets ' under one umbrella.
Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success to ensure you understand solutions available to inventory and p o financing for long term sales and profit growth.