It’s the rare start-up or small business that couldn’t benefit from improved cash flow. As any new business owner could tell you, however, that can be an incredible challenge. If you have sent invoices to customers that they haven’t yet paid, you might consider purchase order financing to bring more cash into your company. This is a fast and simple way to get the funds you need without having to go through a long application process with a bank only to find out it can’t approve your request.

What is Purchase Order Funding?

The most important thing to remember about purchase order funding is that it differs from invoice factoring. With the latter, you sell invoices for goods and services you have already delivered. When you receive funding for purchase orders, on the other hand, it means that another company buys the purchase orders and provides your business with money to pay suppliers for the raw goods you need to fulfill customer orders. Many finance companies stipulate that you can only use the money for this purpose with purchase order funding.

One of the biggest benefits for newer companies that pursue this financing option is that the party providing the funds investigates the customer’s credit. That means you don’t have to worry about denial if your company hasn’t had the time to establish a credit history yet or your own personal credit history has some blemishes.

Don’t Let Business Production Come to a Halt from Lack of Funding

When cash flow dries up, it’s impossible to produce goods and services to keep up with customer demand. You may not even have enough funds to hire the right number of employees. That means business production stops and your reputation suffers. Purchase order funding allows production to continue without interruption, leading to higher profits and greater long-term stability.

Could this business financing option be right for you? Schedule an appointment with Simplicity Capital Financing to learn more or to start your application.