PO financing is short for “purchase order financing”, and it is a useful financial mechanism that helps retailers cover all the ancillary costs of a large purchase order. If your business either has negative or low cash flow, and the costs of covering a purchase order adversely affect your working capital, then PO financing is a viable funding alternative. The primary distinction it makes from factoring receivables is that the PO variant ensures you receive a cash advance for items that have yet to be delivered. The following are a few of the many advantages of this feature.

Helps Businesses Deal with Cash Flow Limitations

By receiving the money upfront to take care of business costs, PO financing ensures that cash flow limitations won’t be the culprit if your business runs into money issues. Other funding methods may still cause you to forego profitable sales opportunities if your cash flow is low. You can instead deal with increased orders to grow your business even as your previous orders are in the pipeline – not hampering you.

Outsource Collections

It is well-known that collections on invoices can strain the business-consumer relationship, which is why a PO financing company can be a godsend – particularly to a consumer-centric company. Having third party conduct this very necessary activity significantly eases things and lets you focus on business and the consumer relationship. 

Creditworthiness Is Not a Factor in Qualifying

One of the biggest impediments to receiving financial aid for a company is their credit score; it determines the interest rates for which you are eligible – assuming you can even qualify in the first place. With PO financing, it is only the credit history of the consumer that is under scrutiny; therefore, as a business, you can almost always qualify for this intermediary.

Lastly, this type of financing is especially beneficial to startups, since they lack the business history to qualify for federal or bank loans.

Contact Fortis Funding today to get the PO financing you need.