For companies looking to truly optimize their cash flow, purchase order financing can be a terrific option. It takes all of the hassles on dealing with the cash crunch during production and distribution allowing management teams to instead focus on the service aspects of their business. It also provides them with instant business capital, enabling them to not only ensure that they have the resources to meet immediate production demands, but also take on new customers, as well. Universal Funding provides purchase order financing for current customers who also engage in an invoice factoring program.
Some Points to Consider
Yet that’s not to say that PO financing is for everyone. Your decision to pursue this financing option will depend upon your unique company resources and the nature of your relationships with your suppliers as well as your clients. There are, however, some basic questions that you and your management team can consider to determine whether or not your company could is a good candidate for PO funding: These include:
- Does your company directly manufacture the products that you sell?
- Do your POs have consignment terms?
If the answer to any of either of these questions is yes, then you may be restricted by the terms of your contracts with your suppliers and customers in the sale of your invoices. However, if your role as a distributor is not restricted by either of these terms, then consider these remaining questions:
- Do you require your customers to have good commercial credit?
- Have your suppliers proven to be reliable in the delivery of their products?
If the answer to these questions is also yes, then selling your invoices is an option you should definitely consider.
We Can Help You
PO funding may just be the solution that your company has been searching for in order to support your operations more efficiently. Yet enrolling in such a service is certainly not a decision that you should take lightly. Fortunately, you don’t have to make this decision blindly. Our team here at Universal Funding can help you carefully analyze the potential benefit that this unique program can bring to your business, ensuring that you have all of the information needed in order to make the most informed decision. To get a sample rate, simply fill out our online form with some basic information about your company, and you’ll see exactly what our PO funding program can do for you.