PO Financing can Help with Funding Your Inventory
Another specialized form of receivable financing is purchase order financing, which allows you to get cash prior to shipment of your product or service. You can then take advantage of early payment discounts or bulk purchase agreements with your vendors as much as 5-7%. This could offset the modest financial charges associated with this type of financing. Let Aggressive Lending Company (ALC) help finance your PO's!
A small start-up company was located in New York. They sold electronic parts to a large manufacturer. The parts were in high demand and difficult to find. The company had a unique relationship with its supplier which allowed it to obtain the parts, but the company had to react fast. The company had been in business less than four months with little sales history. However, the principals had significant experience in the industry, had a $3.2 million order in hand from a credit-worthy customer, and had sourced the parts from a large supplier.
Through purchase order (PO) financing the company overcame the start-up nature of the company and focused on the underlying transaction at hand. In less than one week, the company was able to obtain a $1.95 million financing package that secured payment directly to the supplier for these purchase orders. This allowed the company to realize the sort of profits experienced companies dream of.