For companies that sell products, purchase order financing can be a great way to fund the growth of the business.  Once you have secured that large client and contracted to place your order, you can have often funds advanced to allow you to produce the products thus allowing you to fill a large order where you would not have otherwise been able to. The downsize is that you give up some of the revenue so it takes away from your net profits, but the big upside is that it allows you to grow,  not only by fulfilling an order, but the additional branding that comes with that new distribution channel is sure to pay off in the long run.

Some companies are concerned with losing the up front profits associated with the fees paid for the purchase order financing.  Many of these companies still seek outside investors and often those investors want a stake in the company; a big stake.  The value of purchase order financing is that it is a short term solution which will allow the company to grow, whereas the equity investor results in the permanent loss of equity on your company.

If you have a business with products that are sold through purchase orders, you really owe it to yourself to investigate all of your creative financing options before giving up equity in your company unnecessarily.

Contact us today to learn how we might be able to help you with a creative business funding solution.

I was recently speaking with a business owner who had a problem and he didn’t even realize it.  He was telling me how sometimes they were late to pay their contractors because sometimes their vendors didn’t pay them on time.  I asked him how his contractors responded, and he confided that some of them would sometimes come to him and tell him they could not go to a job site because they did not have gas money due to the late payments.  He also told me about the stress he was carrying knowing that these hard working people’s families were suffering due to the dilemma.

I told him I was sorry to hear that this cash flow problem was causing him so much stress.  He responded by saying that “he really didn’t have a cash flow problem… that’s just how it was”.  I explained to him that when a business cannot pay its employees or contractors because a client had not yet paid their invoices, that constitutes a cash flow problem.  He really had not seen it that way because that was all he know.

I asked him if he realized he could get paid for his pending invoices and he did not.  He had not heard of factoring, so I went on to explain to him what a powerful business strategy factoring is. He kind of got the picture but then said that he probably not get the buy in of management because they did not really care about the employees as much as he did.

So what is the moral of this story? Many times businesses have a problem that they do not realize is a problem because it’s just what they are used to. If there is a better way to do business, doesn’t it make sense to give it a try? I know for me when I have implemented some of the most simple systems in my business, I have been so blessed by the outcome; usually increased productivity, lower stress, and more revenue.

If you are experiencing a cash flow problem or any other operational dilemma in your business, give my team a call today. If we can’t help you, I am confident that we know someone who can. Our strength is not always in what we know, but who we know.

Wishing you success and prosperity!

Anthony