subject: Purchase Order Funding - How To Get Working Capital For Your Company [print this page] Do you possess a company? If you are like most business owners, you most likely have a lot of responsibilities. First and foremost, you have to meet payroll. Each and every time. You also require to pay rent and suppliers - promptly. All this requires working capital.
However, if you are selling products or services to commercial clients or to the government, you are most likely painfully aware that they can take as many as 60 days to pay their invoices. Why? Simply because if you want their company, you have to adapt to their terms. There's no other way around it.
But this also results in an impossible scenario. You have bills that require to be paid immediately but customers who wish to pay gradually. Unless you have lots of money in the bank, it's not a sustainable situation. Ultimately you'll miss payroll, delay a supplier payment, or turn a large opportunity away.
The solution is simple. You just need working capital. One way to get working capital is to obtain a company loan. However, business loans are hard to get and can prove to be inflexible. A much better solution would be to factor your invoices.
Factoring, or invoice factoring as it is most generally known, is really a kind of business financing that is suitable for owners who cannot wait as much as 60 days to get their invoices paid. It provides you with the required working capital to pay rent, suppliers and meet payroll. And, in contrast to a company loan, factoring is easy to get.
Invoice factoring removes the usual 60 day wait to get paid by your clients. The factoring organization provides you with an advance on your soon to be paid invoices. In effect, it speeds up your invoices. By accelerating your invoices, you get the working capital you need to run and grow your company. And, in contrast to a business loan, you will find no arbitrary limits. The amount of financing you get is only limited by your sales. If your sales improve, so does your financing.
If you are running a business that is growing - and you cannot afford to wait up to 60 days to get your invoices paid, think about invoice factoring.
