| Purchase order financing, or PO financing, covers your | | | | places will supply purchase orders for smaller |
| expenses as an importer. If your clients place a big | | | | companies and even start up companies if they meet |
| order, you can secure a purchase order to cover the | | | | certain criteria. You may be required to buy from a |
| bill. Then, when the goods are shipped and delivered, | | | | reputable supplier and then sell to a business with a |
| you can have the client pay the purchase order | | | | certain profit margin. If your profit margin isn't high |
| directly, or pay you and then you pay off the | | | | enough, if you are going to sell the goods yourself, |
| purchase order. Either way, the idea is to have the bill | | | | or if you manufacture the goods yourself, then you |
| settled very soon after goods have been delivered | | | | may not qualify for PO financing. |
| or upon delivery. | | | | When used responsibly, PO financing can be a great |
| Using PO financing as a regular part of your business | | | | tool. Many business owners will need to look into PO |
| will allow you to accept bigger and bigger orders. It | | | | financing at some point. As your business becomes |
| can help you to finance new types of ventures and | | | | successful, clients will trust you with bigger and bigger |
| expand your business internationally. There are a few | | | | orders. You will need the investment capital to fulfill |
| things to think about it you are considering PO | | | | these orders, and that is where PO financing comes |
| financing. | | | | into play. You can increase your turnover and |
| One is the credit worthiness of your suppliers or | | | | business offerings without having the capital on hand |
| manufacturers and your client. PO financing is | | | | to cover the orders. |
| generally only available to quality suppliers and | | | | You should be able to handle your purchase order |
| purchasers with good credit. If you will need a | | | | needs directly through your ocean freight shipping |
| purchase order loan for a longer length of time, it | | | | company. Ocean shipping companies handle foreign |
| may cost more. Ideally, you want to work with | | | | accounts, require payment upon shipment, and can |
| suppliers and clients that pay promptly, or you may | | | | streamline your shipping process. Ocean freight |
| not qualify for purchase order financing. The beauty | | | | companies often have established relationships with |
| of PO financing is that most of the credit liability lies | | | | many foreign suppliers and can expedite the purchase |
| on your buyer or client. They are the ones that will | | | | order process. They handle the logistics of getting |
| be paying for the purchase order, so you stand to | | | | the goods covered by capital, shipped to your client, |
| profit from their credit worthiness and build your own | | | | and process the payment. Choose a good ocean |
| credit profile in the process. | | | | shipping company and much of the process will be |
| PO financing is not just for big companies. Many | | | | hands-off for you. |