One of the hardest things to do is to turn down a customer that approached you for orders. This is experienced by many small Business owners, not because they don’t want to do business, but because they cannot afford to accept another customer. Saying no to a client can taint your business reputation. It gives the impression that you’re not good because you cannot afford to take on more than one order. But you cannot blame small business owners, as much as they want to expand their operations they can’t. Doing so would require additional funds for raw materials and labor costs. Luckily, there is an alternative Financing option that addresses this problem - purchase order financing. Purchase order financing is not a loan. Instead, it is a financing option that allows you to take on more customers and accept bigger orders. Purchase order financing is considered as an advance - it is a system where a lender or creditor pays your supplier for goods and raw materials that will be used to fulfill a client’s order.    This is how purchase order financing works:    You receive a purchase order from a client. You order goods and materials from a supplier. Lenders pay your supplier for your order. Your client pays for their invoice and settles the transaction. Your client receives their order. The supplier sends over the goods and materials. Your clients have good credit rates.   How do I qualify for purchase order financing? The structure of purchase order financing makes it ideal for product importers, resellers, startups, suppliers, and distributors. It is, however, not limited to these types of companies. You are a good candidate for purchase order financing if most of the following are true for your business: You purchase and resell products without adding value to the product through modifications. You do not produce or manufacture the product that you distribute. You make a gross margin of at least 20%. You have partnered with suppliers that have good track records. Your clients have good credit rates. Your purchase orders have not been consigned. Your transactions are non-cancellable. If most of these describe your company, then purchase order financing is a good financing option for you. Note that you are advised to gross at least 20% because lenders would take 5-10% of that as payment for the transaction. Most lenders require a minimum amount of orders for the financing to push through. This amount varies for every lender, so it best to check first before applying.   The advantages of purchase order financing There are many advantages attached to purchase order financing. Hence many small businesses opt to get it. You can get approved even with bad credit. Qualifying for purchase order financing is easy. Compared to bank financing, this alternative financing option is much more accessible. It also requires less paperwork and waiting time. You don’t need a stellar credit score because what the lenders will be checking are the credit records of your customer. Startups and developing companies can apply for this alternative solution provided they meet the minimum order amount required by the lender It promotes business growth and expansion. Unlike most loans that just help you get through cash flow glitches, purchase order allows you to do business and even expand your operations. With a purchase order, you can receive bigger orders and cater to more customers. You get all this without the risk of going into debt because your business operations fund themselves. It is a flexible financing option. There is no ceiling amount for a purchase order financing. The value you get will vary depending on the total value of your purchase order. As long as your total purchase order exceeds the minimum amount required by your lender, you will surely get approved for this financing option.   WeCompete Lenders offers competitive rates for purchase order financing. For more information on this financing option, you may send us an email at [email protected]. To apply for purchase order financing, please call (844) 516-0633.