Businesses often require outside funding in order to accept significant projects that they would otherwise not be able to afford to undertake with their limited working capital. Purchase order financing offers an alternative to taking out loans, which are often difficult to obtain, especially if you need the funds quickly. With this method of funding, the financing company pays your supplier, collects on your customer’s invoice, and then sends you the payment after subtracting its fee. Here are some of the advantages of using purchase order financing when taking on new jobs.

Accept Major Projects

Usually, large projects are expensive to undertake. In particular, the cost of supplies can be considerable. Purchase order financing helps you pay for the needed supplies so that you can accept major jobs from important clients. The ability to take on large projects spurs company growth.

Pay Suppliers Promptly

Suppliers typically want payment upfront for materials, while clients only pay you when projects are complete. This can result in a major problem with your cash flow. Purchase order financing helps to mitigate this problem by assisting you in paying off your suppliers so that you can accept new work.

Receive Funding Regardless of Your Credit Score

Purchase order financing is available to your company even if its credit score is less than excellent. This is because the financing company looks at the credit score of your client that will be paying the bill rather than on your own.

Avoid the Burden of Collections

Besides advancing you the money to pay for the supplies you need, the financing company also takes on the responsibility of collecting your client’s payment. This allows you to focus on completing projects and growing your company instead of getting bogged down with accounting procedures. After your client pays its bill, the financing company sends the funds on to you minus the purchase order financing fee.

For more advice on purchase order financing, get in touch with Commercial Capital Finance.