How to Get Ahead With Purchase Order Finance

 In Purchase Order Finance, Trade & Inventory Finance

It’s becoming more and more evident that using Purchase Order finance as a way to solve financial woes for your business is on the up and up.

Proving to be a viable and smart solution for businesses that require capital to take on larger orders yet don’t want to put their house or business on the line. Yet it seems there is still a large capacity of people still uneducated about what’s available to them in the financial market.

In fact just the other day while reading the abf journal, I came across a great article which profiled Hartsko Financial services. They are based in America and provide Purchase order financing facilities from 50k to millions of dollars. President Richard Eitelberg predicts that Hartsko will lend more than 200 million in 2011, that’s up from 150 million in 2010 and 84 million in 2008. Eitelberg states[blockquote]We provide for the client who doesn’t have any capital and is left with two choices: he finds his angel investor or he finds us. We don’t take any equity in the deal, We’re taking equity in the transaction as a fee based type of thing. He walks away after the transaction owning 100% off his business[/blockquote]

We too at AR Trade Finance are experiencing huge growth with clients requiring a Purchase Order Finance facility. The proof I suppose is in the pudding, while more conventional lending doesn’t seem to be solving businesses problems in the long run. Especially when banks are so quick to say no, it seems entrepreneurial lenders are willing to take on what to the banks see as more risky, offering the little guys a chance to stay afloat.

Eitelberg also mentions that whilst the nature of his transactions has remained the same over the years, the emotional mentality of his clients has changed. They are more ‘desperate’ as he puts it. Which means PO finance, fills a void in the industry that banks and the like don’t seem to be able to do.

With PO finance it’s not the clients financial and credit history that is the focus, it’s the viability of the purchase order in question. What seems to be a deal breaker for the banks is not for a purchase order financier. Eiteleberg goes on to say “I get deals where they have been out for 5 months looking for financing, and I get them when they have two weeks left before they have to get to the store. I think the come-to- reality is that if more people knew more about us and more about what we do and really understood it, they would stop wasting their time seeking bank financing”.

If you have a large order you need funded and are struggling to get financial backing then perhaps you would be suited to a Purchase Order finance facility.  All you need is a verifiable purchase order from a strong customer.

For more information or a face to face meeting with our product specialist, call the office on 1300 652 158.


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