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Most Credit Impaired Applicants Helped...
Purchase Order Financing
What is Purchase Order Financing?
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Purchase Order Financing is short
term funding used to finance the purchase or manufacture
of specific goods that have been pre-sold by the client
to its credit worthy end customer. Funding entails
issuing letters of credit or providing funds that
allow clients to secure the inventory they
need to fulfill customers orders.
Purchase Order Funding
Purchase Order Funding can be used by Manufacturers, Importers, Exporters, or Distributors for:
Issuing Letters of Credit
Payment to third party suppliers for finished goods
Shipping, Packaging, Inspections, etc.
Primary Reasons Why Companies Utilize PO Financing
Company has solid export / import or domestic sales but does not have the working capital to
complete the transaction or continue to grow.
Company doesn't have the expertise and experience to structure
and complete the import or export properly. Even established
international clients will use our expertise to make a transaction safer.
TRANSFER OF FOREIGN RISK|
Client and/or client's vendor (on exports) transfer to lender
the risk of payment by the foreign buyer.
ALTERNATIVE FINANCING VERSUS GIVING AWAY EQUITY IN A FAST GROWING COMPANY|
Lender provides working capital where banks can not because
the company's balance sheet or collateral will not support
sufficient borrowing. An equity placement would force the owners to give
away a high percentage of the company.
Often clients need a quick response in order to get or
keep a sale. Our lender can quickly do its
due diligence and review the facts of the transaction.
There are no committees, lawyers or other
elements that slow the decision process down.
Clients can grow more quickly by having the capital available to
do more business. Clients brokering goods can become principals
thus increasing their margins. Our clients can expand their margins,
save on various costs and increase supplier credit extended to them.
DISGUISE OUR CLIENT'S IDENTITY|
Our clients that are middlemen need transactions secured
in such a way that the end buyer and manufacturer do not become
acquainted. In these situations the end buyer typically issues a letter
of credit to our client, and we issue a letter of credit to the manufacturer.
If desired, our lender, to a great extent, become the
international operations area for a company, thereby allowing a
cost savings and providing expertise to international transactions.
The Benefits of Purchase Order Funding Include the Following:
Allows companies to grow without increased bank debt!
Helps ensure timely deliveries to customers!
Increase market share!