Purchase Order Financing

Purchase Order Financing:  Getting the Materials You Need to Fill an Order

Sometimes it really does take money to make money!

Suppose your growing company secures a big, potentially game-changing purchase order from what could turn into a very good customer.

And suppose it’s your dream deal. You can fill the order well…exactly to the customer’s specifications. The margins are good, and there could be a lot more where this one came from.

So what could be the problem?

Cash flow. Or not enough cash in the bank. It’s possible that sometimes you simply won’t have enough money available to cover the costs of doing business. Materials have to be bought and paid for if your company wants to accept the order and properly complete the job.

The bad news is that, if you can’t pay for what’s necessary to get the order out the door, the P.O. would have to be turned down and your company’s credibility – at least with that customer – would take a nasty hit. It could be a long time before you get another chance.

An Affordable Cash Flow Management Solution

If you find your company in this situation, purchase order financing can be an attractive, affordable cash flow management solution.

In a purchase order financing arrangement, MP Star Financial pays your supplier for materials needed to complete an order for your customer.

This type of financing arrangement involves four parties.

  1. Your company
  2. Your customer
  3. Your supplier
  4. MP Star Financial

But it’s ultimately just a straightforward transaction between you and MP Star. MP Star pays for the materials, and then you make the products and deliver them to your customer. No more cash flow problem!

When a customer’s payment on the invoice is received, your company gets its funds. Also at this time, the cash advance from MP Star is repaid, along with the transaction fees.

This type of financing lets you get your materials exactly when you need them and allows you to fill the customer’s order on time and without interruption to your business or damage to your company’s reputation.  It’s great for up and coming businesses with solid customer orders, but that might have trouble obtaining working capital or that have cash flow problems.

Advantages of Purchase Order Financing

This type of financing is becoming a “go-to” funding source for many manufacturing companies. Here’s why:

  • It doesn’t tie up your company’s cash. Materials can be acquired without using funds you need for other reasons.
  • It’s fast and easy to arrange. MP Star can have your P.O. financed in just a couple business days, or less.
  • You don’t need great credit. MP Star makes decisions based on the credit standing and financial strength of your customer – the company that placed the order with you.
  • It’s flexible. MP Star can structure complicated transactions with combinations of purchase order financing, factored invoices, and other funding options.

In a nutshell, financing your purchase orders is a great way to get the materials you need, without draining your cash reserves.

If you’re dealing with quality customers, you should never again have to worry about being able to fill and order.

Getting Started with Purchase Order Financing

Want to learn more about financing your purchase orders? Consultations are free, and if it’s right for your company, it’s easy to get started.

Call MP Star Financial at (800) 833-3765, extension 150 to discuss your cash flow management solution.

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Since 1995, MP Star Financial has helped more than 1,000 businesses and people like you resolve cash flow issues.

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Phone: 1-800-833-3765
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