In this article, we will cover some of the advantages of purchase order financing. This should help you determine if po financing is the right solution for your company. If you require a detailed explanation of the product, please go here to learn what is po financing. But in summary, it’s a product that helps wholesalers and distributors that need funds to fulfill a larger order. Some advantages include:
- It can handle large orders. This is the biggest advantage of this solution. The size of your line is usually determined by the capabilities of your supplier, the creditworthiness of your client, and your ability to execute the order. It is ideal of entrepreneurially minded owners that are in growth mode.
- It’s flexible. The line is flexible and will adapt to your business cycles. It will grow with your company and adapt to increasing sales, provided that your transactions meet the funding criteria.
- It’s easier to qualify for than bank financing. Qualifying for po financing is comparatively easy, especially when compared to institutional financing options. It can even be used for some start up situations.
- It can be setup quickly. Most financing lines can be setup in about two weeks.
- It can finance both local, import and export transactions. Lastly, it has the flexibility to finance local, export and or import transactions, as long as all the participant meet the criteria. Our client (the reseller/distributor) must be based in the USA or Canada.
We also have a related article about the disadvantages of purchase order funding.