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What is Purchase Order Financing?
The term purchase order financing describes short term funding used to purchase or manufacture goods that have been pre-sold to your client. This type of business financing is particularly useful for businesses that have to fill orders when the available cash resources are not readily accessible. Purchase order financing allows businesses to take on additional clients by ensuring that the business will not have to turn down orders because of working capital restrictions.
Why do businesses choose to use Purchase Order Financing?
By choosing DB Squared's Purchase Order Financing
- You are able to spend more time focusing on building your business rather than chasing invoices.
- Instead of waiting for 30 to 60 days for customers to pay their invoices, you are able to gain access to your working capital immediately.
- The financial flexibility gained will allow you to reinvest in your company at a much quicker rate.
- You will no longer need to turn down orders, new jobs, or new lines of business because of working capital restraints.
- Manage seasonal business cycles.
- Enables you to offer credit terms to your clients.
- Take advantage of supplier discounts.
How purchase order financing improves your growth rate
Purchase order financing allows your business to increase its client base as well as its capacity to handle larger customers and larger purchase orders. Increasing your cash flow also gives you the ability to take on new clients while maintaining strong relationships with your established client base. Increase your presence in the market place by saying yes to new clients and new opportunities.
Increasing your client base and capacity to fund the production of larger orders
Purchase order financing is specifically designed to improve a small business’s capacity to fill orders, fast. We understand that the speed at which you receive funding affects your ability to gain new business.
Purchase Order Financing Basics:
- Your customer issues a written purchase order that details the product being purchased, the unit purchase price, a specific description of what product will be delivered, and the agreed upon total purchase amount.
- Once your business receives this purchase order you recognize that committing the required working capital to honor the purchase order will create a significant burden on your cash flow.
- DB Squared can provide the working capital needed to fulfill the order. We are able to fund up to 100% of the needed amount to produce the product outlined in the purchase order.
- Once your business fills the order, your client or buyer will pay DB Squared the full amount of the purchase order.
- We then collect the amount originally advanced to the business including a small fee and return the remaining balance to the business.
Check out how this representative example illustrates the value of Purchase Order Financing.
Why Choose DB Squared for Purchase Order Financing?
Unlike many business financiers we never charge fees for:
Purchase Order Financing Process
A step by step accounting of the financing process when working with DB Squared including how to get started and what to expect.
Purchase Order Financing: Large Companies
An explanation of how purchase order financing benefits large companies.
Purchase Order Financing: Small Businesses
An explanation of how purchase order financing benefits small businesses including the effect on growth rate.
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