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How to finance your importing business with purchase order financing

Most importers have seen their businesses grow dramatically in the past years. The drop in the cost of overseas manufacturing coupled with the insatiable appetite of US consumers for more and cheaper goods has created a bonanza for the industry. Both large and small importers have seen the size of their orders - and revenues - grow dramatically. However, for any business to grow successfully in this industry it must be well capitalized, or have a source of financing.

Private Equity Fund Of Funds Let me give you an example. Let's say that your company gets a very large purchase order (PO) from your best customer. You, of course, would go to your supplier and try to fulfill the order. However, if your supplier is unwilling to extend you terms, you may need to post a letter of credit or similar instrument. This is where small and mid size importing/exporting companies run into problems. If they cannot post a letter of credit, they will not be able to fulfill the order and will lose the business. This is also where purchase order financing can help you.

As opposed to most business financing options, factoring and purchase order financing are easy to obtain and can be set up quickly. About Commercial Capital LLC We can provide you with a letter of credit, purchase order financing or invoice factoring. For a free quote or consultation, call (866) 730 1922 About Commercial Capital, LLC and Marco Terry

Curve Equity Exposed Fund What is purchase order financing?

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Equity Income Funds Purchase order financing is a tool that can help you finance orders that you cannot afford to fulfill. It allows you to take large orders from great clients and deliver them, without using any (or little) of your own funds. PO financing lets you grow your business using other people's money. It's a great tool to take your business to the next level.

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Capital Casebook Equity The basics of purchase order funding

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Private Investment In Public A PO financing transaction is fairly simple. Once you have or are close to having a purchase order from your customer, you approach the PO financing company. The PO financing company then provides financing for the transaction, enabling you to purchase the goods from your supplier and deliver them to the customer. Once the goods are received and verified, the PO financing pays your supplier on your behalf. Payment to your supplier can be provided in a variety of forms, although it is commonly done using a letter of credit. Once the goods have been received, you send an invoice to your client and wait for payment. Once your client pays the invoice, the transaction between the PO funding company and your company is settled. If that transaction was structured properly and if your margins were good, this transaction should have required little if any out of pocket expenses from your company. This is why PO financing is so powerful.

  • If payment in full is not made by the promotion expiration date listed above, finance charges will apply from the transaction date.
  • If approved, CIT Bank will make a loan to you for the amount financed to pay for your purchase. CIT Bank will pay the merchant on your behalf to pay for the purchase.
  • If you repay the amount you borrow (the amount financed) in full on or before the promotion expiration date listed above, you will repay only the amount financed, and CIT Bank will charge you no finance charge for the loan.

Equity Mutual Funds The cost of PO financing

Birmingham Contact Equity The cost of PO financing will be based on a number of criteria, including your experience in the industry, the complexity of the transaction and the credit worthiness of the end customer. A rule of thumb for the industry is that a transaction must have profit margins of at least 20%, or better, to be affordable. That will allow you sufficient funds to cover the cost of PO funding and still realize significant profits.

Private Equity Investment Firm Cost reduction tricks

Complying Deal Equity Funds The main cost driver in purchase order financing is risk. The risk in the transaction is reduced dramatically substantially once the product is delivered and an invoice is generated. A common trick to reduce the cost of the transaction is to factor the invoice, and use the factoring proceeds to close the purchase order financing part of the transaction. Since accounts receivable factoring is cheaper than PO financing, this little trick can reduce the total cost of the transaction by a few points. To capitalize on this cost reduction trick, you should be sure to work with a factoring company that also does purchase order financing. That will enable you to close the purchase order funding component seamlessly.

Equity Msn Private Wyoming About Invoice Factoring Group

American Equity Investment Invoice Factoring Group can provide you with a free purchase order funding , purchase order financing or accounts receivable factoring quote. Marco Terry, the president, can be reached at (866) 730 1922.

Equity Index Funds Copyright (C) 2006. Commercial Capital LLC - All rights reserved. Article may be reprinted provided it is not modified and all links are kept live.

Equity Private Team Wyoming About Commercial Capital, LLC and Marco Terry

Equity Group Investment Marco Terry is president of Commercial Capital LLC, a leading provider of factoring financing to businesses. For more information or a free consultation, please visit our web sites at Invoice Factoring Group and factoring financing or call us at (866) 730 1922.

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