What can a business do if they are short on cash but need to fulfill large pre-sold orders from clients? One solution is to use purchase order financing, a type of alternative financing that is gaining in popularity with many businesses. 

Purchase Order Financing Defined

Purchase order financing is a funding option for firms that need working capital to fulfill their customer orders. For many smaller firms that receive larger-than-usual orders, there may not be enough money on hand to pay suppliers for order fulfillment. Purchase order financing takes care of this problem by providing up-front cash to pay suppliers. It is particularly useful for firms such as retailers, importers, contractors, warehousers, and others that presell products that they then obtain from primary suppliers. 

Benefits of Purchase Order Financing

There are many benefits that come with purchase order financing. Here are a few of the most common:

Available to many businesses, even start-ups. Unlike conventional loans and some other financing options, purchase order financing is available to early-stage firms and even start-up businesses.
Up to 100% of costs may be covered. Typically, purchase order financing will cover all of your order-fulfillment costs.
Funding arrives very quickly. Traditional loans are an example of funding that can take a long time to materialize. Not so with purchase order financing, in which your funds arrive quickly after a short, hassle-free application process.
Financing keeps pace with business growth. As your business receives more and larger orders, the amount of funding you receive from purchase order financing increases accordingly. You are free to expand. You can sensibly scale your business upward as your market share increases. 

In summary, purchase order financing provides an efficient means to deliver even large orders to your customers, no matter if you have little cash on hand.