Grow your SME with smart purchase order funding

As a business owner, one of your primary objectives is to keep your operations running smoothly while growing your company. However, sometimes growth requires a significant amount of capital that you may not have on hand, especially in the current climate where business expenses are on the rise. 

This is where purchase order (PO) funding comes in. Purchase order funding is a financing solution that can help businesses get the funds they need to fulfil large orders and grow their operations. In this blog post, we will discuss how PO funding can help grow your business and why it is often a more accessible option than other loan methods for most SMEs.

What is purchase order funding?

Firstly, what exactly is PO funding? PO funding is a financing solution where a lender provides funds to a business to fulfil a purchase order. Once the order is fulfilled, the lender collects the payment from the customer and subtracts the funding amount, fees, and interest. PO funding is ideal for businesses that cannot afford to pay for the raw materials, manufacturing, or labour costs to fulfil a large order upfront. PO funding can help businesses free up their cash flow and ensure that they can complete large orders and grow their business without worry.

Benefits of purchase order funding

PO funding can help businesses that are new or have limited credit histories. Many lenders will look at the creditworthiness of a business before providing them with traditional financing. However, with PO funding, the focus is on the customer who placed the order, not the business. This means that businesses that do not have a significant credit history can still get the financing they need to fulfil large orders and grow their business.

Another advantage of PO funding is that it can help businesses expand their product offerings. If a business receives a large order for a new product, they may not have the funds to manufacture or purchase the necessary raw materials to fulfil the order. With PO funding, businesses can take on these types of orders and expand their product offerings, which can help them attract new customers and increase revenue.

PO funding can also help businesses that are struggling with cash flow issues. Many businesses experience cash flow issues because their customers take too long to pay their invoices. With PO funding, businesses can access the funds they need to fulfil orders, and they do not have to wait for their customers to pay their invoices. This can help businesses keep their operations running smoothly and avoid any delays in fulfilling orders.

Lastly, PO funding can help businesses build relationships with their suppliers. With PO funding, businesses can pay their suppliers on time and ensure that they receive the raw materials they need to fulfil orders. This can help businesses build a positive reputation with their suppliers, which can lead to better prices, better terms, and better relationships. Most SMEs struggle with getting their foot in the door with the right suppliers and having the money available early can help make negotiations easier.

In conclusion, PO funding can be an excellent financing solution for businesses that need capital to grow. It can help businesses free up their cash flow, expand their product offerings, overcome credit challenges, manage cash flow issues, and build relationships with suppliers. If you are a business owner looking to grow your operations, PO funding is an option worth considering. Contact us today to learn more about purchase order funding or to apply for a purchase order. If you would like to learn more about whether a business loan is right for your business, view our recent blog post.