When small businesses quickly become popular, they sometimes lack sufficiently strong cash flow to handle the orders that come in. However, the approval process for bank loans is lengthy, and in the end you may not qualify. One solution to this dilemma is purchase order loans. This form of funding involves obtaining sufficient cash upfront from a lender so you can pay the manufacturer that fulfills your order. Here is some information about this method of financing so you can see if it is a good fit for your business.

Obtain Approval Easily

Traditional bank loans require a stringent credit check, but this is not the case with purchase order loans. Lenders are not concerned with your own credit but rather the creditworthiness of your clients. If your clients have good payment histories and credit, you can quickly receive the funds you need.

Strengthen Cash Flow

You can use the financing you obtain through purchase order loans for more than just fulfilling orders. For instance, you can order needed inventory and supplies, advertise more extensively, pay the salaries of your employees, or go after new clients. The funding helps you keep pace with your growing business without having to depend so much on banks with their difficult requirements.

Receive Help with Fulfillment of Orders

After your products have been manufactured, they are sent directly to your clients, and a third party verifies that the orders have been successfully filed. This relieves you of the necessity of overseeing this aspect of the order fulfillment, which frees you to focus on the acquisition of new orders and the management of your company. As your business grows rapidly, you have the peace of mind of knowing that you will be able to keep pace with the changes.

For more advice on purchase order loans, get in touch with Painted Horse Financial.