Purchase Order Financing for Distributors and Suppliers
If you are a distributor or a supplier, you could benefit from our purchase order financing products. Purchase order financing allows companies to take advantage of growth opportunities. Distributors and suppliers can gain the ability to bid on high profile (and high margin) contracts which will increase industry presence and provide customers with the confidence that their orders will be fulfilled in a timely manner.
Capstone works closely with distributors and suppliers to secure funding based on outstanding purchase orders. Rather than focusing on your company’s credit score or balance sheet, we base our funding decisions on the strength of your customer and their creditworthiness. We take into consideration the length of time they have been operating, their net worth, financial statements, and how current they are on paying their vendors.
Purchase order financing will benefit you in numerous ways including:
- Nearly immediate access to cash – We can typically provide financing within 48 hours of approval.
- Early pay discounts – When you can pay your invoices early, your manufacturer may offer discounts, better payment terms, better pricing, or higher credit lines.
- Ability to offer customers favorable payment terms – Attract customers with generous payment terms and feel confident knowing you have access to sufficient working capital to sustain and grow your business.
- Acceleration of your growth – Take on larger contracts and orders. When you don’t need to worry about having cash on hand to fund your manufacturers, you will be able to spend your time getting larger orders or pursuing new customers. This can help you grow your business more rapidly and offer more flexible terms to your own customers.
- Growth of your labor force and the addition of employees – Business growth requires workers, however, the increased costs inherent in seasonal labor force changes do not have to be burdensome. Retain the skilled workers you need to maintain your distribution or supply schedule.
- Easier access to add new equipment – The need for new equipment doesn’t have to slow you down. Obtain the equipment you need to keep up with demand and stay competitive.
Capstone can also issue letters of credit or funds which will allow you to secure presold goods necessary to deal with new sales. This can all be accomplished without you having to deal with time-consuming bank credit applications and long waiting periods.
Letters of Credit
The combination of purchase order financing and letters of credit can provide the critical capital required to get your customer’s orders fulfilled. A letter of credit is a document produced by a financial institution delivered to another financial institution that guarantees payment of a certain amount. It is most often used between banks that are in different countries, for the purpose of international trade. If as a business owner you pursue import financing with a manufacturer from a foreign country, they can more confidently accept your proposal to work with them even if you don’t have the money to pay them upfront. The letter of credit will serve as a guarantee of payment from your bank to theirs, as long as they hold up their end of the previously agreed-upon transaction. This removes the risk that your supplier doesn’t perform or deliver the goods to the standard your end-customer requires.
Future-Proofing Your Business
With purchase order financing and accounts receivable factoring you can continue to grow your business, hire new employees, and take advantage of vendor discounts. Having cash on hand, or on-demand, ensures your business can continue to grow and thrive in these challenging times and not be concerned about the cash flow you need to meet your everyday obligations. Further, these financial tools are just as scalable as your business. You will not need to go back to the bank for a larger line of credit to take on new orders. As long as you can procure the contract, you know you’ll be able to fulfill it with purchase order financing and accounts receivable factoring.
If you are a distributor or supplier scrambling to make sense out of these challenging times, let a Capstone representative explore the various financing options available to you. We help our clients look beyond the fog of uncertainty to help businesses thrive and experience long-term growth.
Capstone is committed to helping distributors and suppliers in various industries. For more information regarding our financing options, please email us at [email protected] or call us at (212) 755-3636 to speak with a representative today. We will work with you to develop a customized financing program that will allow you to accept larger contracts, purchase raw materials needed to fill existing contracts, or meet your immediate cash flow needs.