Why PO Financing Is the Smart Short-Term Loan ChoiceThere is an art as well as a science to growing a small business into a large corporation. While not every business has national or global sales goals, no entrepreneur starts a new enterprise without setting growth goals. Frequently, those goals include the need for periodic support through financing, whether from bank loans, lines of credit, PO funding or other options. The economy dictates how challenging it will be to qualify for various short-term financing options, and when the economy is struggling, entrepreneurs can have difficulty finding the funding they need to grow. Here is where knowledge of PO financing can help your business grow quickly regardless of the economic climate.

How a Short-Term Loan Can Help

One of the reasons people cite for starting a business is the thrill of the unexpected. When you’re an entrepreneur, every day is different. You never know what challenges or opportunities may arise. You have to be a big-picture thinker, constantly synthesizing past results, the present situation and future goals to determine the best course of action. Owning a business is exciting, but it can also be frustrating when a growth opportunity comes your way that requires more ready cash than your business has access to. Here’s where a short-term loan can help.

Types of Short-Term Loans

The most common and best-known type of short-term loan is the bank loan. But there are other short-term loan options that growth-minded companies are increasingly making good use of. These loan types include lines of credit, asset-based lending (also called factoring), equity loans and purchase order finance tools.

PO Financing Advantages

Of all the types of short-term loans, PO financing is rapidly becoming a popular choice for small to mid-sized companies that want to quickly grab market share and make more profits. There are several reasons for PO financing’s newfound popularity.

  • PO financing is easy to qualify for. If you have ever had the experience of applying for a bank loan, you probably remember the reams of forms, the credit and background checks and the lengthy wait time until your lender returned its decision, which was often “no.” Bank loans are still the best-known type of funding and thus competition for available loan money is fierce. However, with PO financing, your list of pre-qualifications is short and it’s easy to know right away whether you qualify or not. If you have an active purchase order or a credit-worthy customer in-hand, you can qualify for PO financing with most lenders.
  • PO financing funds arrive quickly. Another reason PO financing is becoming so popular is that you don’t have to wait long to get your funds. You can expect to receive a check or a line of credit within one to two weeks of your application. PO financing is designed to help businesses capitalize on unexpected growth opportunities, so it works quickly to meet your short-term funding needs.
  • PO financing is flexible. PO financing can be used for a variety of industries, including manufacturing, wholesale, distribution, import-export, retail or apparel, shipping, government contracts, industrial, service contracts and other similar industries. PO funding can be applied toward an active purchase order, a letter of guarantee or credit, raw materials, direct manufacturing costs, direct shopping, overhead costs, finished goods, components, project-specific labor costs, deposits and more.
  • PO financing really works. Finally, PO financing is the smart short-term loan choice because it really works. It is easy to qualify for, fast, flexible and delivers fantastic results. Many companies have used PO financing to fulfill larger orders with credit-worthy clients and have become regional, national or even international forces in their respective industries almost overnight.

If you’re an entrepreneur who wants to grow your business, establish your market presence and build your market share quickly, PO financing is a short-term lending option that was created with your success in mind. The next time you have an opportunity that feels just slightly beyond your company’s reach, instead of saying no, consider PO funding.

About the Author: Raul Esqueda is founder and CEO of 1st Commercial Credit LLC in Austin, Texas. Raul has experience funding businesses of all industries and sizes in the United States, United Kingdom and Canada and has written many articles about purchase-order finance, factoring and asset-based lending.