Paul Joachim

Most companies hate to turn down business. This is especially true when a large order has been placed. Big orders often give companies an opportunity to bring in large amounts of revenue and to establish themselves in their industry. The latter can help spur future growth. However, when such a large order is placed that a company does not have the capital on hand to fulfill it, there will likely be two primary options, turn down the business or attempt to get a bank loan.

Invoice financing and purchase order financing can be a fantastic way for a business to generate the capital that they need to either pay current bills and debt or grow their business.

Imagine the opportunity to complete a $5,000,000 job but having to turn it down because you don't have the operating capital. This could be crushing to your business, not only because of lost revenues but also because it forces you to turn down a job that might bring prestige to your business. It's hard to be one of the big boys (or girls) if you can't complete big jobs. Being a new company or one with so-so credit can make things even harder because you may not have the option of borrowing the

How many times have you spoken to a prospect that says they need purchase order funding? I hear it all the time. More often than not, they are asking for purchase order funding because they just got a big order and need the cash flow to fulfill it.

Many business owners would much rather build their companies without debt and would prefer not to take out a loan. While debt can be very beneficial because it provides businesses with the capital they need to grow and stay afloat, it has two very big strikes against it; it has to be paid back and it's risky. When a company develops too much debt, it takes very little for its financial standing to be ruined. Most owners would prefer not to go this route if at all possible.

Purchase order funding can be a powerful tool for businesses. This sort of financing allows companies to generate money for growth without having to apply for a loan or take on new debt. The first thing that many businesses do when they are faced with a cash flow problem is to attempt to take out a bank loan.

Accounts receivables factoring is a very good way for companies to fast track needed working capital. Traditional commercial financing, particularly a bank loan, generally requires a fair amount of time. A company has to first apply for the loan, offering their most sensitive financial information. This can be a bit troublesome and time consuming. By the time a business receives notification on whether or not they will receive the requested monies, it may be too late for them to utilize them.

Factoring can be a great tool for your company. It can help your business get the monies needed to keep the business afloat or to take advantage of opportunities to expand. While it obviously is not the best choice for every company, it is for others. Below, we will discuss scenarios where accounts receivables factoring might be an option that makes sense.

Businesses looking to expand, generally only consider two options, getting a loan or using the profits they have already generated. Both of these can be great choices under the right circumstances. If a company has been in business long enough to qualify for a loan, doesn't already have an incredible amount of debt and has enough profits on hand to fund their growth this getting a loan or using profits already on hand is fine.

Government contracts can mean big business for many companies. The government has deep pockets and such contracts can add a significant amount to a company's bottom line. However, because these jobs tend to be so massive, it can cost a great deal of money to fulfill them. Businesses may or may not have the capital on head to cover the costs.