Michael Newman’s latest ‘e-Wealth Daily’ article is titled “How Purchase Order Financing Could Get You Money Now”. [Michael Newman’s Article]


Michael Newman’s latest ‘e-Wealth Daily’ article:

How Purchase Order Financing Could Get You Money Now

If you’re a small business owner or are trying to get your start-up off the ground, you’re likely well aware that it’s pretty tough to get a bank loan these days. Big and small banks across the
country have reduced their small business lending substantially and it’s left many business owners wondering where their bailout help is.

With banks lowering credit limits and refusing loan applications, how are the small business owners on Main Street supposed to maintain and grow their businesses?

Purchase order financing is a way you can get money relatively quickly. It gets you the short-term credit you need if you can’t get a bank loan.

A purchase order, in essence, is a guarantee from a customer that they are going to buy said number of product from you. In this case, let’s say you have a purchase order for 20,000
widgets that is going to cost you $30,000, but you don’t have the $30,000 on hand. You could go to a purchase order financing business — of which there are a half-dozen or so
major ones in the country — for the cash you need. Don’t expect them to give you the money directly, however.

What they do is take your purchase order and directly pay for the manufacturing and shipment of the widgets. When the customer pays for the widgets, they pay the purchase order
financer, who takes its fee, then gives you the rest. Essentially, they handle all the costs for you. They pay for the manufacturing, so for the time being they own that product.

This financing, however, comes with a sizeable fee; far more, in fact, than any bank loan or line of credit. Fees can get expensive in a hurry. A “New York Times” article featured a
purchase order financing company in New York called Hartsko and its fees were as follows:

–3.5% for the first 30 days
–1.25% for every 10 days after the first 30
–Upwards of 40% annually

Purchase order financers are not the bank, and are therefore not interested in long-term growth, profitability, credit ratings, past financial problems or any of the factors most banks look at in
deciding whether or not to administer a loan. For the most part, all these companies need to see is that you’ve got a valid purchase order that needs to be fulfilled. It’s a short-term
relationship that’s about the order you bring to the table.

If you’ve got a purchase order that needs financing and your business is ready to go, then it could be the right idea for you.

e-Wealth Daily

About e-Wealth Daily

The e-Wealth Daily Bulletin brings you daily tips, advice and breaking news related to home businesses, small businesses and internet marketing. Our team of experts gives you the information you need to take your business pursuits to the most profitable level. Founded by Adrian Newman in 2003, the e-Wealth Daily Bulletin and www.ewealthdaily.com are a division of Lombardi Publishing with online newsletters reaching over 100,000 subscribers each month.

* IMNewsWatch would like to thank e-Wealth Daily for granting permission to reprint this article.

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