The funds you need to fulfill large orders and keep your customers satisfied.
Purchase Order Financing at a Glance
Taking on significant customer orders can often push a small business past their capacity, especially if they lack the cash necessary to purchase supplies for fulfillment. Yet, passing on those orders may hinder business growth and tarnish a good reputation.
This is where Purchase Order Financing can be a small business’s ideal solution to fulfill large orders without straining working capital.
Purchase Order Financing is a short-term financial solution that helps small businesses fulfill large customer orders.
Using this arrangement, a financing company will provide the funds necessary for a small business to cover the costs associated with fulfilling a customer’s purchase order. Once goods are delivered, the customer pays then repays either the business or the financing company directly, who then forwards the payment to the small business, minus a financing fee.
Purchase order financing is particularly beneficial for businesses lacking the cash to complete large orders without depleting their existing resources.
Take on big orders without sacrificing cash flow and growth opportunities.
Your PO financing company takes on the responsibility of payment collection, freeing up your time and resources.
Meet customer demands, pay your suppliers, and keep your reputation intact without impacting your cash flow
Confidently take on orders that you may not have been able to with low debt exposure
As with all financing options, there are minimum requirements needed from the lender to evaluate your eligibility and determine the terms of your financing arrangement.
Here are the requirements you, your suppliers, and your customers must meet:
Navigating risks is all part of being a small business owner, and we recognize that as well. This is why we must consider some important factors to assess the health of your business and determine if it’s the right time to take on additional debt. Here are the crucial factors we must consider and why:
Personal credit scores provide us insight into how you handle debt on a personal level, which often reflects how you manage debit in your business. If you have bad credit, reach out to one of our financing specialists to see what other options might be available to you.
Lenders prefer businesses with at least two years of operation, since this demonstrates a stronger likelihood of success.
Consistent annual revenue is important to demonstrate your business’s financial stability and ability to make payments. We would never approve financing that could lead to financial strain or a negative impact on your business.
Of course, these criteria are only a small part of what is taken into account when assessing loans for small businesses. A more comprehensive set of criteria[1], that considers the business behind the numbers, will be taken into account as final financing decisions are made.
Here are a few of the many ways that purchase order funding for small businesses is an effective way to fuel their growth.
Secure purchase order financing to cover costs for substantial orders to meet demands of major clients and establish credibility and a stellar reputation.
Use purchase order financing to introduce new products to attract a wider customer base and expand your market share.
Purchase order financing can cover expenses associated with expanding your business to new markets, increasing your visibility and reach.
Use purchase order financing to handle seasonal fluctuations to keep your clients satisfied and your operations running smoothly during peak periods.
Who Should Use Purchase Order Financing?
Purchase Order Financing is available for any B2B or B2B business that provides physical goods to its customers.
Here are a few industries where PO financing is common:
PO funds can be a valuable tool for small businesses facing challenges of fulfilling large customer orders. But while it can provide an ideal solution, it’s essential to weigh the pros and cons to ensure that PO financing is the right choice for your business.
There are many advantages of Purchase Order Financing for small businesses, including:
While Purchase Order Financing can provide valuable benefits, it may also come with some disadvantages, including:
Before getting started with the application process, it’s important to do some research to determine if Purchase Order Financing is the right choice for you and your business.
Here are some things to consider:
Assess your current financial situation to determine how much funding you need to fulfill an outstanding customer purchase order. Consider whether attempting to fulfill it on your own would deplete your working capital and compromise your financial stability.
Creditworthiness impacts the approval process. Review both your credit score and that of your clients to identify any potential issues and determine if they can quickly be addressed.
How to choose a Purchase Order Financing Company
The financing company you choose to work with can make all the difference in your financing experience.
Look for a purchase order financing company with experience in your specific industry and one that has positive online reviews and customer testimonials.One option to secure a reliable partner for purchase order financing is to let Kapitus connect you with one of our trusted lenders.
Purchase order financing through Kapitus can be the ideal solution that ensures that your company never has to turn down large customer orders and miss out on growth opportunities.
Applying for financing through Kapitus takes less than 5 minutes of your day and, upon approval, you’ll be connected to one of our reputable and trusted lending partners to get your business the funds it needs to take orders with confidence.
Applying for Purchase Order Financing through Kapitus is a hassle-free and straightforward process.
Simply follow the steps outlined below:
Congratulations! Once you are approved for Purchase Order Financing, the next step is to finalize the details of your financing arrangement with your lending company.
Once the terms have been settled, your lender will advance you the cash you need to fulfill your customer’s order or pay your suppliers directly. After goods are delivered, your customer will either pay your business or pay the lending company directly, depending on your terms. If your customer sends payment to your lender, they will simply return payment to you, minus fees and the amount advanced.
If you find that purchase order financing isn’t an option for you or your client, then please do not consider your funding journey to be at an end.
Kapitus offers a range of financing products that may be a better fit for you and your business. If you need assistance, feel free to reach out to one of our financing specialists who can provide valuable guidance and help you find the financing solution that fits you best.
The cost of purchase order financing through Kapitus can vary depending on your lender, the specific terms of your financing agreement, and the creditworthiness of you and your client.
Here are some common factors associated with purchase order financing:
Who Should Use Purchase Order Financing
Pros & Cons of Purchase Order Financing
How to Get Started with Purchase Order Financing
How do I Apply for Purchase Order Financing
I’ve Been Approved for Purchase Order Financing – Now What?
What to do if You’re Declined for Purchase Order Financing
How Much Does Purchase Order Financing Cost?
Before we can get started with your business loan, we request that some basic minimum qualifications are met. These essential criteria allow our financing specialists to better evaluate your eligibility and individual situation to find you the perfect financing solution for your needs.
Kapitus’ Referral Program is designed specifically for organizations and professionals who work with business owners on a daily basis. As a direct lender, we can offer your clients the opportunity to get financing when they need it, while rewarding you generously for each successful referral. The Referral Program also equips you with advanced training and support, and a wealth of marketing resources for your convenience.
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Copyright 2024 Strategic Funding Source, Inc. All rights reserved. Kapitus and the Kapitus logo are registered trademarks of Strategic Funding Source, Inc. Loans made in California by Strategic Funding Source, Inc. dba Kapitus are issued pursuant to California Finance Lenders License No. 603-G807.