​Sales spikes are something many businesses face—from startups to legacy businesses—but the less cash you have to work with, the harder it will be to face a dramatic increase in sales. Some companies make most of their money during these short but profitable seasons, so how can you take advantage of sales spikes when you have limited cash on hand?
 
This is where purchase order financing comes in.
 
What is purchase order financing?
Purchase order financing is short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. In purchase order financing, a business receives an order from a customer, determines the costs, and applies for purchase order financing. If the business is approved, the purchase order financing company will pay the supplier for the order (or a percentage of the order, depending on the agreement), and the business will send an invoice to the customer and the purchase order financing company. The customer will pay the purchase order financing company, who will deduct their fees and then send the business the remainder of the funds.
 
Purchase order financing is helpful for businesses who want to:

• Expand their customer base.
• Improve their cash flow.
• Take advantage of seasonal spikes in sales.
• Grow their business.

 
How purchase order financing helps with sale spikes
Sale spikes are fairly predictable throughout the year as holidays and changes in the weather are closely related to consumers’ buying patterns. However, having enough working capital to meet the larger purchase orders is less predictable.
 
Back-to-school shopping creates an annual spike in sales as families purchase the necessary clothing and school supplies for their children’s upcoming school year. For example, a business that sells backpacks and lunch bags to retailers could face more incoming orders than they have the working capital to pay their suppliers for.
 
Instead of missing out on increased profits, the business can apply to a purchase order financing company, which will assess the deal largely based on the buyer’s credit (which is very helpful for newer startups that lack financial history). Since the purchase order financing company is providing the funds upfront to pay the suppliers, the business can fulfill more backpack and lunch bag orders more rapidly than with their working capital, taking advantage of the sale spike and building a great track record with their customers. Since purchase order financing is short-term, businesses can meet their financial needs without having to incur debt or enter a long-term partnership.
 
Look for the right purchase order financing company
When looking for a purchase order financing company, business owners want to look for a company that:

●Is attentive to detail. A purchase order financing company will handle transactions and communication with a business’s suppliers and customers, so look for someone who will do it well and not overlook important details or information that create frustration and poor customer experience.

●   Has a high rate of success among customers. Business owners don’t just want financing; they want to work with a partner who is invested in the success of their business and will foster trust and good communication. Look for a purchase order financing company that is well respected and positively reviewed by customers.\

●   Is efficient. The more quickly and smoothly sales go, the more profit a business can make and the more customers it can satisfy, which is particularly important during a sales spike.
 
Having less free capital to meet sales spikes does not need to keep your business from taking advantage of extra profits if you partner with a purchase order financing company to fulfill additional orders.
 
Looking for a purchase order financing company for your business? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.
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The call for entrepreneurship has been heard by many—according to the Global Entrepreneurship Monitor, over 31 million Americans (16 percent) of the adult workforce are entrepreneurs. Some of the top reasons entrepreneurs list for choosing to step out on their own include: wanting to be their own boss, dissatisfaction with corporate America, and a desire to pursue their passions.

Whatever the reason for becoming one, all entrepreneurs face a long list of challenges, risks, and rewards—the need for funding a startup being at the top of the list.

In this article, we will cover several options for funding your startup, how they work, and which option is best for you. 

Credit cards
Credit cards are a great choice for startups as they require few qualifications or business history to apply for—all that most require is a good personal credit history. Many companies have attractive introductory offers and generous rewards (such as cashback or travel points). Credit cards can help you start spending quickly and facilitate day-to-day operations.

A credit card may be the right option for your startup if:

• You want financial flexibility.
• You need to get up and running quickly.
• You have an excellent personal credit history.

Line of credit with a CDFI
A line of credit with a community development financial institution (CDFI) can be an excellent choice for startups—CDFIs are private financial institutions created to provide funds to those left out of more traditional banking and investment options. The capital CDFIs offer is generally short-term and self-liquidating (fully amortizing loans), and the goal is to create financial self-sufficiency for underserved communities (rural and urban) to aid economic and community growth. 

A line of credit with a CDFI may be the right option for your startup if:

• You’ve been turned away by traditional banks.
• You or your business/startup are part of an underserved community.
• Your business will increase economic growth development for your community.

Home equity loan
For entrepreneurs who are also homeowners, tapping into home equity can be a viable option. A home equity loan (AKA a second mortgage) lets you access your home equity as a lump sum that can be used for business purposes with your home as collateral. Home equity loans can offer lower interest rates, larger loan amounts, and flexibility in how you use your funds. If you manage your home equity loan well, you can even improve your credit score.

A home equity loan may be the right option for your startup if:

• You want financial flexibility.
• You hope to improve your credit score.
• You need a lump sum to start your business.

Invoice factoring
Invoice factoring is a great option for startups and businesses that have not been running long enough to qualify for a traditional small business loan. When a business factors its invoices, it sells its accounts receivable to an invoice factoring company. The factoring firm advances cash to your business and then collects on the outstanding invoices. The balance is paid to the company less a service fee. Invoice factoring is used in a variety of scenarios and industries, from startup to high growth to recovery.

Invoice factoring may be the right option for your startup if:

• You have little to no business financial history.
• You want an option that does not require collateral.
• You need quick cash flow. 

Conclusion
There are multiple options to secure funding for your startup, the key is figuring out which one best suits your specific business and personal goals. Regardless of what option you choose, when looking for a funding institution or partner look for someone who will:

• Communicate well.
• Pay attention to the details.
• Work in line with your business goals.

Looking to secure capital for your business? Whether you are a new business, going through a rough financial season, or hoping to take advantage of an exciting growth opportunity, we can help.

Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.

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The road to financial success for a small or medium-sized business is not paved with yellow bricks but by securing the right financing option to match a business’s needs—but which financing option is best for your business? Many startups and small to medium-sized businesses cannot secure a traditional bank loan because of a lack of financial history. This is where other financing options, such as invoice factoring and purchase order financing, come in to bridge the gap.

In this article, we will examine the purpose of these types of financing, and help you determine which option is best suited for your business.

Invoice factoring
Invoice factoring is a versatile financial tool for businesses of almost any size and industry. When a business factors its invoices, it sells its accounts receivable to an invoice factoring firm. The factoring firm advances cash to the business and then collects on the outstanding invoices. The balance is paid to the factoring firm minus a service fee.

Is invoice factoring the right option for your business?
Invoice factoring may be the right option for your business if:

● You need more immediate cash flow. Invoice factoring provides businesses with
immediate access to cash, which is crucial for covering expenses or taking advantage of time-sensitive opportunities.
● You want to extend longer credit to customers. Invoice factoring allows businesses to offer longer payment terms to customers without taking a bite out of their cash flows.
● You want to lower bad credit risk. Factoring firms typically handle credit checks on customers, reducing the risk of non-payment for your business.
● You want to avoid debt. Factoring does not incur debt (unlike traditional bank loans).
● You desire to spend more time focusing on core business activities. With the factoring firm handling collections, you are now freed up to handle the core business responsibilities only you can do.
● You need a customized agreement. Factoring agreements can be structured and
customized to meet the specific needs of your business.

Purchase order financing
Purchase order financing is a type of short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. In purchase order financing, a business receives an order from a customer, determines the costs, and applies for purchase order financing. If the business is approved, the purchase order financing company will pay the supplier for the order (or a percentage of the order, depending on the agreement), and the business will send an invoice to the customer and the purchase order financing company. The customer will pay the purchase order financing company, who will deduct their fees and then send the business the remainder of the funds.

Is purchase order financing the right option for your business?
Purchase order financing might be the right option for your business if:

● You want to expand your customer base. Purchase order financing enables
businesses (especially small businesses) to accept larger orders and acquire new
customers.
● You need to improve your cash flow. Purchase order financing provides immediate funds to cover supplier costs, which helps your business manage any cash flow challenges and take advantage of great sale opportunities.
● You have a seasonal spike in sales. Businesses facing a surge in orders during peak seasons can use purchase order financing to meet the increased demand without draining their cash reserves.
● You want to grow your business. Purchase order financing creates financial flexibility you can use to expand your business by investing in expansion activities (such as purchasing new equipment or entering new markets).

Both invoice factoring and purchase order financing have the potential to grow your business, free up your cash flow, and help you succeed.

Looking for financing options for your business? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.

99.9 percent of U.S. businesses are small businesses, according to data from the U.S. Small Business Administration. Whether you start from scratch, inherit a legacy business, or purchase an already-established business—the dream of owning a business and becoming an entrepreneur is alive and well in the U.S. today. But all businesses have this in common: the need for capital. Whether it’s to fund a startup, expand business growth, or cover a rough patch, all small businesses need it.

Whatever stage of business you are in, finding the right partner can be the help you need to keep moving forward—for over 30 years, Prairie Business Credit has been partnering with businesses to support business growth.

The Prairie Business Credit story
Trevor Morgan started Prairie Business Credit in 1993 after 20 years of experience with regional banks and private finance companies. Dylan Morgan, Trevor's son, joined Prairie Business Credit in 2003 to continue in his father's footsteps by learning the family business.

Prairie Business Credit serves both as a trusted financial resource and consultant to entrepreneurs in many industries including manufacturing, distribution, technology, service, equipment finance, importing, and staffing.

How Prairie Business Credit can help your business
There are two ways Prairie Business Credit gives cash to your business:

1. Purchase order financing.
2. Factoring.

Purchase order financing is a type of short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. In factoring, a company turns over its account receivables to a factoring company.

The factoring company gives the business an advance and then follows up with customers for invoice payments. Once invoices are paid, the client company receives the balance minus a fee. Both types of financing can be just the bridge a business needs to cover a cash gap and succeed in growing and reaching its goals.

The reasons a business may need:

Purchase Order Financing
● Being unable to qualify for traditional bank loans.
● Needing the capital to operate at a larger capacity to fulfill orders quickly.
● Requiring a trustworthy company to help shoulder some of the burden while the
    business experiences new growth.

Factoring
● Needing better cash flow management.
● Capturing new sales opportunities.
● Being too new for a bank loan.


How Prairie Business Credit has helped businesses succeed
Since its inception, Prairie Business Credit has helped nearly 70 percent of its clients progress to bank or self-financing. From its Chicago base, Prairie Business Credit has served clients from coast to coast with the funding and advice they need to stabilize, succeed, and grow.

• Joe Krippelz, Jake’s Inc. Precision Machining and Rebuilding, Aurora, IL, said, “After the downturn, our bank relationship changed. We were getting back on our feet and making payments, but we needed cash to meet our customers’ needs. We looked at a lot of lenders. Prairie Business Credit understood manufacturing and they understood our needs. They came up with flexible solutions that helped us with cash flow so we could take orders, even months out. We didn’t lose orders and they helped us manage receivables, so we stayed on top of past due accounts. Prairie Business Credit supported us until we could get an SBA loan with a bank."
  
  
• Boyd Miller, Wisconsin Thermoset Plastic, ​Milwaukee, WI, said, “I bought Wisconsin Thermoset in 2008. Over the next two years, our sales dropped by 50 percent. As we started crawling back, we needed to find additional cash or close the doors. Our receivables were growing. Our bank’s hands were tied but they introduced us to Prairie Business Credit. Prairie Business Credit helped us with capital for operations and they brought discipline to our invoicing, so collections went more smoothly. In 24 months, we were back on our feet. We’re on top of receivables and control our cash better. Prairie Business Credit are good people, honest, smart, and straightforward—they kept our doors open."
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• Bill White, CFO | Focus Micro, Inc., Manufacturer of Digital Security Equipment and Software, Redmond, WA, said, "We manufacture and resell digital security equipment and software. Venture capitalists offered to fund us, but we wanted to maintain control. Banks wanted a longer track record. When a major retailer selected us for a nationwide rollout, our sales grew from $100,000/month to $1.3 million/month. That's when we called Prairie Business Credit to craft a deal to fund our growth. Now, we're securing a commercial bank line for ongoing capital needs. Prairie Business Credit provided the bridge we needed to take our business to the next level."

Looking to secure working capital for your business? Whether you are a new business, going through a rough financial season, or hoping to take advantage of an exciting growth opportunity, we can help.

Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.

Running a successful business in a niche market can be a rewarding experience if you do it well. Niche markets come with unique challenges and benefits, and while they are not for everyone, for those who succeed, selling in a niche market can be a rewarding and profitable experience.

One way to become successful in a niche market is to use purchase order financing to turn the cons into pros, and to make the most of the opportunities niche markets present. 

Pros and cons of a niche market

The pros:

• Being on a short list of options for customers. 
• Having a clearly defined target audience. 
• Selling to a tightly knit and well-connected community. 
• Having less competition than more crowded markets.

The cons:

• Having a small margin for error or mistakes.
• More limited options for finding equipment or suppliers. 
• Selling to a smaller community of customers. 
• Fierce competition for the customers in the smaller market.

A pro can quickly become a con in a niche market if handled incorrectly (for example, selling to a smaller customer base). If a business can complete orders quicker with high quality, the smaller customer base will work in its favor with positive reviews and word-of-mouth recommendations. On the other hand, if a niche business is unable to fulfill its orders, it can become marked with a bad reputation among customers who will give negative word-of-mouth reviews. 

How purchase order financing helps you succeed in your niche market

Thriving in a niche market means being the bigger fish in a small pond, which requires resources. Purchase order financing is a type of short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. Businesses often use purchase order financing to:

• Fulfill large orders they cannot afford to fill alone.
• Face seasonal or short-term spikes in sales.
• Keep up with customer demand without taking on traditional debt.

Niche markets have clearly defined target audiences with customers who know what they want. These customers will give positive or negative feedback to the rest of the community. Purchase order financing will enable your business to stand out as you will be able to fulfill larger orders at a pace that surpasses your competition, leading to a faithful customer base and a strong reputation in the community you sell to.

What to look for in a purchase order financing partner 

Businesses want to choose well when picking a purchase order financing partner as their name and way of treating suppliers and customers will become connected to the business’ name and reputation (of even greater importance in a niche market). When looking for a purchase order financing partner, business owners want to find a company that:

• Is attentive to detail. A purchase order financing company will handle transactions and communication with a business’ suppliers and customers, so look for someone who will do it well and not overlook important details or information that create frustration and poor customer experience.
• Has a high rate of success among customers. Business owners don’t just want financing; they want to work with a partner who is invested in the success of their business and will foster trust and good communication. Look for a purchase order financing company that is well respected and positively reviewed by customers.
• Is efficient. The more quickly and smoothly sales go, the more a business can complete, and the more customers it can satisfy—an efficient purchase order financing company will help accomplish this.
• Will do their homework on your niche market. Understanding the needs and wants of a niche market customer base is critical for success; businesses should partner with purchase order financing companies who will put in the necessary time and effort to understand the specific requirements of a niche market. 

Conclusion
Niche markets can be hard to succeed in as they present unique challenges and opportunities—purchase order financing can be a great option for niche-market businesses to gain an edge over their competition and build a loyal customer base. 

Are you a niche market business looking to partner with a purchase order finance company? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success. 

You’ve done it; you have started your own business—many obstacles and challenges have already been overcome to reach this point, and more lie ahead. Now, you must break down barriers to create a solid market entry, gain customers, and build an excellent reputation to ensure lasting success for your business.

Startups can have difficulty gaining financing for their business; they have not been in business long enough to establish the kind of credibility and financial history traditional bank loans require. But startups need sales and customers to gain credibility and build that history—so how do they get the financing to make that happen apart from a bank?

Purchase order financing is an option many startups use to cover cash shortages and fulfill customer orders that they would otherwise be unable to afford.

What is purchase order financing?
Purchase order financing is a type of short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. Reasons a business may need purchase order financing include:

● Having a large order they cannot afford to fill.
●Not qualifying for other types of financing, such as traditional small business bank loans.
● Facing a seasonal or short-term spike in sales.

In purchase order financing, a business receives an order from a customer, determines the costs, and applies for purchase order financing. If the business is approved, the purchase order financing company will pay the supplier for the order (or a percentage of the order, depending on the agreement), and the business will send an invoice to the customer and the purchase order financing company. The customer will pay the purchase order financing company, who will deduct their fees and then send the business the remainder of the funds.

While established businesses often use purchase order financing, it's an ideal option for startups, since traditional financing is more difficult to qualify for. The purchase order finance company will focus more on the orders received and the company’s ability to fulfill them. Purchase order financing companies also tend to move faster, enabling businesses to fulfill orders and sales quickly.

Barriers faced by startups and how purchase order financing can help
Creating a new business or startup is not for the faint of heart; there are many learning curves and processes to get in motion. Building a reputation and customer base in the market and competing with already-established businesses can be an uphill climb. Having the money to consistently make sales and fulfill orders is also challenging. Startups often fail when they cannot gain traction in making sales, getting new customers, or run out of cash to run their business, but are disqualified from getting bank loans.

With purchase order financing, these barriers are removed or made much smaller. Purchase order financing:

● Requires fewer qualifications to apply than a traditional bank. A startup’s lack of
financial history is not a barrier to qualifying for purchase order financing, as the
purchase order financing company is more interested in the credit and financial stability of the business’ customers.
● Enables even a startup business to operate at a larger capacity. Instead of being
held back from making more sales or fulfilling larger orders, purchase order financing enables businesses to operate at a larger capacity than the cash they have on hand.
● Shoulders part of the load while startups are getting established. Purchase order financing companies handle many of the details of sales transactions. In the whirlwind of a startup, it’s nice to have a partner who can shoulder some of the load.

What to look for in a purchase order financing partner
Businesses want to choose well when picking a purchase order financing partner, after all, their name and way of treating suppliers and customers will become connected to the business’ name and reputation.

When looking for a purchase order financing partner, business owners want to find a company that:

●Is attentive to detail. A purchase order financing company will handle transactions and communication with a business’ suppliers and customers, so look for someone who will do it well and not overlook important details or information that create frustration and poor customer experience.
● Has a high rate of success among customers. Business owners don’t just want
financing; they want to work with a partner who is invested in the success of their
business and will foster trust and good communication. Look for a purchase order
financing company that is well respected and positively reviewed by customers.
● Is efficient. The more quickly and smoothly sales go, the more a business can
complete, and the more customers it can satisfy—an efficient purchase order financing company will help accomplish this.

Successful market entry is vital for your startup, but there are many barriers in the way to making that happen. Purchase order financing can be a tool you use to take you from starting your business to growing your reputation and sales and establishing yourself in the market.

Looking to secure working capital for your startup? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.

​A new year has begun, and you anticipate a record year of growth and profit for your business. Careful financial planning and management are key to making these goals a reality—and this is where cash flow forecasting comes in. In this article, we will talk about why cash flow forecasting benefits your business and how you can get started. 

What is cash flow forecasting?
Cash flow forecasting is when a business estimates its future revenue and expenses for a given period (anywhere from one- to-12 months). Creating a cash flow forecast gives a business the ability to be the most efficient with its time and money and even take advantage of any windows of opportunity that may arise to increase sales or profits. 

Without a cash flow forecast, businesses can lack the key financial information needed to give them the confidence to grow. Businesses can also be taken off-guard by expenses or unexpected costs if they have not anticipated them ahead of time. 

Five benefits of cash flow forecasting
Cash flow forecasting is a vital step for any business that wants to thrive. Cash flow forecasting helps businesses:

1. Gain confidence in their finances. Knowledge is power—and knowing what they can reasonably expect will enable businesses to prepare in advance, increase day-to-day efficiency, and adapt when the unexpected happens. Business owners can also be more confident when communicating their business to customers, suppliers, potential lenders, or financial consultants. A cash flow forecast will also reveal inefficient or ineffective systems or plans currently being used to run the business.
   
   
2. Plan for expected sales and expenses. The year flows in cycles and seasons, and businesses are no exception. A cash flow forecast will reveal what times throughout the year sales increase (perhaps for a holiday or a change in the weather). Likewise, it will also show predictable expenses, allowing businesses to plan ahead so they are not strapped for cash when those expenses arrive.
   
   
3. Grow understanding of customers and suppliers. A cash flow forecast is created using past data from a business to predict and estimate future revenue and expenses. Over time, the data can help businesses learn about their customers and suppliers. There may be opportunities, insights, or patterns that can be used to strengthen business connections and increase revenue. 
   
   
4. Plan for growth and investment. Cash flow forecasting will highlight what times throughout the year may have some available cash to invest in growing a business. A cash flow forecast can also make managing debt easier and help business owners evaluate the value of new sales or opportunities.
   
   
5. Raise profits. Whether it comes with decreasing costs or increasing revenue, a cash flow forecast empowers business owners to make wise decisions about when to spend, when to save, and what opportunities exist to increase sales or efficiency. 

Five things to keep in mind when cash flow forecasting
When business owners begin cash flow forecasting, they should keep these things in mind:
​

1. Set a defined timeframe to forecast for. Recommended forecast times are anywhere from one- to-12 months. Forecasting in shorter timeframes allows business owners frequent reviews to determine forecast accuracy and adapt accordingly.
   
   
2. Estimate all cash inflows, outflows, and expenses. Include any price increases, wage adjustments, and tax or loan payments. A forecast should also include non-sale revenue, such as tax refunds. 
   
   
3. Estimate reasonable assumptions for the future. There are reasonable assumptions that can be included in a business’ forecast, such as seasonal sales or inflation. Both seasonal sales and inflation can be estimated based on past sales, trends, and statistics.
   
   
4. Leave room for unexpected changes. Businesses should always leave room for unexpected expenses with an “other” category in their cash flow forecast. Weather disasters, supply chain issues, or customer needs may arise, and expecting the unexpected will prepare a business to meet those expenses head-on. 
   
   
5. Review the forecast against the actual and adjust over time. Cash flow forecasting is not an exact science; however, the accuracy and effectiveness of a forecast will improve over time if it is regularly reviewed and compared to the actual revenue and expenses—enabling business owners to adapt and grow as they go.

Cash flow forecasting gives businesses a financial roadmap to know where they’ve been, where they are going, and what hazards and possibilities may lie ahead. 

Looking for guidance on how to start cash flow forecasting today? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.
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Wondering if invoice factoring is the right financing method for you? Invoice factoring is a versatile financial tool for businesses of almost any size—and in almost any industry. An alternative to traditional financing, it can provide immediate access to working capital. 
​
When a company factors its invoices, it sells its accounts receivable to an invoice factoring company. The factoring firm advances cash to the company and then collects on the outstanding invoices. The balance is paid to the company less a service fee. Invoice factoring is used in a variety of different scenarios, from start-up to high growth to recovery, and it can also be used across industries. 

This article looks at how invoice factoring can help in different industries. Understanding how it might be used to address the unique dynamics of your industry or market can help you make informed decisions about managing your business's cash flow. 

Manufacturing and distribution

Manufacturing and distribution businesses often contend with long lead times and production cycles that can result in extended or delayed payment terms. Sometimes seasonality creates revenue fluctuations that can cause cashflow gaps, which can hinder operations and growth. And, of course, the continued supply chain pressures of the last few years have also played a role.  

How factoring helps: Invoice factoring provides quick access to cash, which can help manufacturing and distribution companies purchase raw materials, cover production and operations costs, and promptly fulfill new customer orders.

Transportation and trucking
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Companies in the transportation industry often grapple with high operating costs, including acquisition and upkeep costs for vehicle fleets. Continued high fuel prices add additional pressure. 
How factoring helps: Invoice factoring can help transportation industry businesses cover fuel and maintenance costs, meet driver payroll, and expand or upgrade their fleets, without the need to wait for shipper or broker payments to arrive. 
Food and beverage

Food and beverage manufacturers and distributors must navigate variable demand and procurement of perishable ingredients that can make inventory management a challenge. 

How factoring helps: With invoice factoring, businesses in the food and beverage industry can more easily maintain consistent inventory levels and ride seasonal demand fluctuations while also meeting supplier payment terms—in the end to satisfy customers in grocery stores, restaurants, and more. 

Professional services

Professional services businesses may face mismatches in revenue and expenses, especially during seasonal peaks and valleys or when a large client is late paying invoices or retainers. Some professional services businesses like staffing companies, IT, and skilled consulting firms commonly rely on invoice factoring to smooth out these financial cycles. 

How factoring helps: With invoice factoring, businesses in the professional services industry can access working capital for needs like payroll as well as expenses like insurance premiums, IT and software investments, and more. Invoice factoring can give these companies access to the cash they need to meet immediate needs even when customer payments or retainers are delayed. 

As a financing method, invoice factoring is versatile enough to meet the specific needs of a variety of different industries, including these as well as many more. No matter your industry, factoring can be a valuable tool to improve cash flow, manage expenses despite variable demand, and support company growth.

Looking for guidance on how factoring works in your industry? We can help. Prairie Business Credit is a national working capital provider to young, growing, or recovering businesses. We offer accounts receivable financing, purchase order financing, and equipment financing. Our company serves both as a trusted financial resource and consultant to entrepreneurs dedicated to building their businesses and ensuring their success.