Growing businesses can often be caught in the cache-22 situation whereby they need to expand their customer numbers in order to raise revenues, but are unable to take on larger orders due to a lack of immediately available capital.
It can leave businesses facing a long road to tangible growth whilst these new business opportunities fall into the hands of competitors who do have the funds to deliver these orders.
Purchase order finance is an ideal solution for SMEs who wish to fill this cash flow gap. Capital is provided directly to your suppliers, leaving you to focus on delivering an outstanding product or service to your clients whilst continuing to grow your customer base.
At Capitalise, we can help to match your business with specialist lenders who have a proven track record in providing these types of financial solutions to similar businesses within your sector.
Or give us a call today on 0203 696 9700.
What Is Purchase Order Finance?
Why Use Purchase Order Finance?
Unlock the true potential of your business without overstretching your working capital.
Access Better Rates From Suppliers
By using purchase order finance to secure stock from suppliers, you'll be treated like a cash buyer rather than having to open an additional line of supplier credit. This can help you to attract far better rates, increasing your profitability from each order.
Affordable, Transparent Repayment Terms
Your finance partner will work with you, your customer and your supplier to ensure that affordable repayments are made once the PO has been successfully delivered to your client and the invoice has been raised.
We carefully assess the suitability of each lender on our panel in relation to the needs of your business and the industry in which it operates. We'll match you with lenders who have dealt with similar business before, giving them invaluable experience when it comes to dealing with your suppliers and providing the required finance.
Who Is purchase order Finance For?
Purchase order finance is most commonly used by SMEs who are unable to take on larger orders from customers, mainly due to a lack of cash resources which are needed to make a full, upfront payment on goods.
Although the eligibility criteria will vary from lender to lender, growing businesses have found PO finance easier to come by than more traditional lending options since the creditworthiness of your customer is also used as part of the decision making process.
Or give us a call on 020 3696 9700.
How Does Purchase Order Finance Work?
Unlike invoice factoring and discounting, purchase order finance is secured against the initial PO from your customers rather than their outstanding invoice. The level of finance provided by the lender is mainly centred around the size of the order as well as the creditworthiness of your customer.
This can be a major plus for growing businesses as the focus of the underwriting is based upon the customer's ability to pay for the completed PO rather than solely assessing your own business finances.
Once the order has been delivered and the invoice raised, you'll repay the amount that was initially borrowed, along with any applicable transaction fees and interest. Invoice finance can be used to help facilitate the quick payment of your purchase order finance agreement whilst you wait for your customer to settle their own outstanding balance.
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