Is Purchase Order Financing Right for Me?

Purchase Order Financing is a tool your business must consider if you are in need of Capital to complete delivery of a large scale order. 

Purchase order financing is a funding option for businesses that need cash to fill single or multiple customer orders. In many businesses cash flow problems exist. There will be times where there is simply not enough money available to cover the costs of doing business.  

Business Finance Options

Purchase Order Financing is best for small businesses and startups who need inventory, have solid history and are working with reputable suppliers. It is a highly effective solution to turning a lack of capital into much-needed supplies as quickly as possible.

How is a Purchase Order Transaction Traditionally Structured?

Here is how a purchase order financing transaction is usually structured. Let’s assume that your customer has placed a purchase order to buy $100 worth of widgets. Let’s also assume that your supplier charges you $70 for those widgets. Additionally, your supplier wants you to prepay the $70, and your company does not have the money to prepay for the goods. This is where purchase order financing comes in. The financing company can help you complete this sale by structuring the following transaction (assuming you have a financing contract in place):

1. The purchase order financing company reviews the transaction to ensure that it complies with the funding requirements.
2. The purchase order financing company pays $70 to your supplier directly. Depending on the circumstances, payment is made by letter of credit or by wire transfer. Note that payment to foreign suppliers must be made by letter of credit only.
3. Once the payment has been received, your supplier manufactures the widgets.
4. The widgets are delivered to the customer, who inspects and accepts them.
5. At this point you can invoice your customer. The transaction can proceed in one of two ways. You can factor the invoice and use the factoring proceeds to pay the purchase order financing company and close that line. The transaction would then proceed as a conventional factoring transaction. Alternatively, if factoring is not an option, the transaction can settle once your customer pays for the end goods.

Once certain conditions are met invoice financing can become a handy tool to grow your business.

If you have ever received a large order but you were not able to complete the sale due to lack of equipment, lack of staff or just a general lack of resources this may be the type of business financing you will need to compete in a larger marketplace. 

With a Purchase Order Finance strategy you will be able to, 

• Experiencing rapid growth
• Be more confident in searching out larger sales
• Not be concerned with traditional bank financing as your only source of funding

Purchase Order Financing

Purchase Order Financing Rates.

1. Rates are typically determined by the complexity of the transaction. Many people feel the pricing is adjusted for risk, but not really. PO Funding finished goods will always be less expensive than PO Funding a Work In Process.
2. PO Financing rates will vary based on volume and type of transaction to be funded. If you want to try and get better rates, make sure your presentation is buttoned up. If your lender feels you have everything in order they may feel inclined to give you preferred pricing. It shows you are organized and won’t be too challenging to work with.

If you work with a reputable Finance Company you should not incur any hidden fees. Everything should be laid out in front of you in black and white. 

If you are interested in working with a company that can provide you with a Purchase Order Financing plan to grow your business contact NorthWest Finance. Purchase Order Financing, Equipment Lease Financing, Invoice Financing and Merchant Cash Advances. Call us today!

Fuel Business Finance

Minneapolis St Paul and Across the U.S

612-615-8196

www.businessfinancingfast.com

Invoice Financing | Purchase Order Financing | Equipment Lease Financing |
Merchant Cash Advances

Invoice Financing for Commercial Food Kitchens

Invoice Financing can greatly enhance your food service business and provide you with the capital to grow and propel your business forward to the next level.

Alternative Business Finance

There are no easy businesses. Any industry you decide to specialize in has it's easy and difficult areas. You can probably even say there are no easy areas just some that you may be more comfortable with.


The food service industry is no exception. In fact the food service industry has a reputation for being difficult. Running a business and a kitchen can be likened to being in a military setting. Everything has to go just right in order for your business to prosper. This industry requires you to operate under pressure in fast paced conditions. And in many cases even if everything goes right and you manage to pull off this difficult commercial kitchen type business you still have to wait in many instances  30-60 days or even more to get paid.

Most sales in business are done on payment terms. COD is great but for most business relationships it is just not very common. What is common is performing a service or delivering some goods and having to wait for your payment. In many cases this can put a heavy burden on your financial situation. You don't have to like it but in many cases this is the way business is done. Fortunately there is an option. Many companies are unaware that these 30-60 day invoices have a cash value and can be used to finance operations long before they are due for collection.


You can accelerate your revenues without putting pressure on your clients.

Essentially you have the ability to finance slow paying invoices as long as they are payable by credit worthy customers. This type of financing is known as Invoice Financing or Factoring.

Once you complete the food service and invoice your client, the factoring company advances up 80% of the invoice to your company. This is the first installment and is wired within one business day. The second installment covers the remaining 20% and is wired once your client pays in full. The fee is discounted from the second installment.

This is a very feasible alternative to traditional Bank Financing. Banks require a lot of paperwork and have many stipulations regarding how funds can be used. Invoice financing companies move fast. They require very little paperwork and can complete a funding transaction in many cases in less than 24 hours.

If you own a business and you  have tried to obtain financing from a bank in the past you know what we are talking about. A Bankers job is to approach all transactions as a skeptic. They are trained to ask a lot of questions. Their job isn't to loan you money. Their job is to protect the assets of the bank. Plain and simple. Sure banks will finance business projects but their objective is to maximize the banks assets while protecting it's exposure to risk.

Fast Business Financing

Invoice Finance Companies have already done the research and know what type of financing transactions they are dealing with. Invoice Financing is what they do all day everyday. If the invoice is backed by a Payor with great credit the finance charges will reflect that if the Payor has less than perfect credit history then the finance charges will reflect that as well





In any case you can contact an Invoice Finance Company like NorthWest Finance and know within a matter of hours how much funding you can get and how fast you can get it. Invoice Financing has been utilized by businesses for many many years and it as great of  business finance solution today as it was back then.

Contact NorthWest Finance today and get the Finance your business needs tomorrow!!

Fuel Business Finance
612-327-5756
www.businessfinancingfast.com

Invoice Financing | Merchant Cash Advances | Purchase Order Financing | Lease Financing

Invoice Financing for your Business

Is invoice financing right for you? If your business from time to time comes up against a cash shortage and you are billing out jobs on a 30 - 60 -90 day cycle then you can take advantage of Invoice Financing to free up some much needed capital and move forward with your businesses plans for the future.

Fast Business Financing

Invoice financing has been utilized by companies for a very long time. It is believed that the industry started around 4,000 years ago in the days of King Hammurabi of Mesopotamia. This was also around the time of the Babylonian and the Sumer empires; later the Romans began selling promissory notes at a discount. In modern day, we can trace these modern day financing back to the 1300s when in Italy money was advanced against the delivery and payment of grain shipped abroad. This moved through to the term ‘merchant banking’ in the 1600s and 1700s, where funds were advanced for goods before they were shipped overseas.

The first industry in the United States to use invoice factoring as a standard business procedure was the textiles industry. These companies had huge expenditures in cotton and raw materials which were required to fill orders and ultimately earn considerable profits.

Starting in the 1960s, companies and industries experienced greater difficulties and increasing delays in trying to obtain bank loans and other types of traditional business funding. 

That is when modern companies of all types realized that getting advances against outstanding invoices really made sense. If you have a pile of invoices sitting there why not turn them into cash after all in business cash is king right?

One aspect that makes this type of financing so attractive is how quick and easy it is to get funded. Typically A simple application usually one or two pages long is filled out, you submit that with the invoices you would like to get financed and within 24-48 hours you get funds deposited right in your bank account.

Just about any industry can be financed with invoice financing with few exceptions. Pretty much if you do business with other companies there is a really good chance you will qualify for this type of financing.

 How Invoice Financing Works      

Invoice factoring is a form of invoice financing that allows companies to sell their accounts receivable to improve their working capital. This financing provides the business with immediate funds that can be used to pay for company expenses.

Business Finance Alternatives

Factoring is easier to get than conventional financing because you are technically selling an asset rather than getting a business loan. The most important requirement to qualify is to have invoices from creditworthy commercial clients. As a result, factoring is available to small businesses that don’t have substantial assets or a long credit history.



Fees involved in Invoice Financing 
Typically in an invoice financing relationship there are no set up fees or fees to maintain an open account. Once you submit an invoice for financing the finance company will advance up to 80-85% of the value of the invoice once the balance is collected you receive the remaining portion of the balance minus the finance fee which is typically 2 to 3.5 percent. This is about the same percentage as accepting a credit card.

Most business invoice finance companies will set up an account and leave it open so you can just submit invoices when you need capital for any purpose for your business.  This makes invoice financing such n attractive financing option for businesses nationwide.

If you have invoices you would like to submit for financing contact a professional invoice financing company like NorthWest Finance. We finance all types of businesses in many types of industries. Our business finance application process is seamless and fast. Get the financing you need for your business in hours not weeks. 

WHEN BANKS SAY NO WE SAY YES!!

NorthWest Finance
612-615-8196
www.businessinvoicefinancing.com

Invoice Financing | Purchase Order Financing | Merchant Cash Advances | Leasing