 “No one who achieves success does so without acknowledging the help of others. The wise and confident acknowledge this help with gratitude.” —Alfred North Whitehead. Every good business owner knows that people and relationships are their foundation—the people along the way who have been responsible for your education, encouragement, and support are what make your business possible. Parents/grandparents, mentors, teachers, friends, customers, financial partners, staff/employees—they are why you are here. In this season of thankfulness, it’s important to express appreciation for everyone who has been part of the journey. Practical ways to express gratitude Here are a few ways you can show your customers, employees, family, and friends how much you appreciate their support. ● Sharing your appreciation publicly ● Personal acknowledgements ● Celebrating milestones ● Rewards or ‘thank you’ gifts Sharing your gratitude publicly is a great way to get the ‘thank you’ message out to a large group at once. You can do this on social media platforms or through community events. Use the opportunity to share the story of your business, acknowledge your supporters' contributions, and cast a vision for a bright future. Personal acknowledgments can be as simple as a phone call/text, a card, or a heartfelt email. It’s not about the format, it’s about the message. Begin your messages by calling the recipient by name and show them how much you value them as an individual. Everyone needs to feel seen and valued; this will only increase the strength of the relationship you share with your supporters. Who doesn’t love to celebrate? Milestones exist not only to give us a goal to reach but also a point to stop, reflect, and celebrate. Who better to celebrate milestones than those who took the journey with you? You can celebrate milestones with special events (virtual or in-person) and promotions, or share a peek into the magic behind the curtain that makes your business run. Remind your supporters what they have done to make your success possible and get them excited about the great things the future has in store. Rewards or thank-you gifts could come in any form, from a fruit basket or coffee gift card for your employees to special discounts or exclusive access to new products or services for loyal customers. The size of the gift will vary but be sure your genuine gratitude shines through in your presentation of the thank-you gift. We want to say thank you After being in business for 30 years, Prairie Business Credit has learned the value of trust, relationship, and gratitude. 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. We consider all our employees to be part of the Prairie Business Credit family and are grateful for every person who has been a part of our journey to where we are now. We consider our success defined by our clients’ success and we are proud to have served clients from coast to coast with the funding and advice they need to stabilize, succeed, and grow. We know the value of hard work, mentorship, and personalized relationships with clients and partners. We are proud of our employees and clients. We are grateful to every teacher, mentor, family member, client, and employee who has gotten us this far. From the Prairie Business Credit team: thank you. Want to work with a company that provides capital and values their clients? 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.
0 Comments
 The final few months of the year are upon us, bringing with them beloved holidays, time with family, and some of the most dramatic changes in profit and expenses in the year.
Some businesses experience a spike in sales over the holidays, while others, like seasonally-based businesses such as gardening equipment suppliers, may need to tighten their belts for the winter. All businesses need to prepare for this season to manage additional expenses, fluctuating profits, or increased product demand. Regardless of your industry, the key to thriving during the holiday or winter season is maintaining strong cash flow. Six Ways to Maintain Cash Flow Here are six strategies to maintain cash flow and help your business thrive whether you are in a busy season or not. 1. Incentivize pre-sales and early payments Incentivizing customers to buy sooner rather than later is one way to bring cash in ahead of time, enabling you to cover costs if you need additional inventory or staffing, or to cover expenses during your slow season. 2. Stay on top of inventory management Over- or under-stocking can lead to wasted time and money. By analyzing past sales data, business owners can better forecast demand, allowing for smarter and more precise ordering. This not only ensures that inventory aligns with customer needs but also supports effective cash flow management. 3. Offer promotions and holiday deals Preparing promotions for the holiday season can retain loyal customers and attract new ones, increasing your sales volume and improving your cash flow. This also creates a faster turnover of inventory which is also good for cash flow. 4. Manage expenses and delay non-essentials Reviewing expenses in advance and identifying non-essential items that can be postponed is a great way to maintain cash flow. This ensures you have more funds available to handle a sales spike or navigate a slow season. 5. Build a cash reserve A cash reserve provides a reliable safety net for unexpected expenses. By steadily growing your reserve throughout the year, you can strategically use it to cover costs and expenses during periods of low cash flow. 6. Consider short-term financing options For business owners who may not have cash on hand or in reserves, short-term financing is a great option. Options such as a line of credit, a business credit card, or, for some businesses, purchase order financing or invoice factoring may be an option. Purchase order financing is short-term financing that can help your business pay for the inventory needed to fulfill incoming customer orders. Invoice factoring is when a business 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 factoring firm minus a service fee. Both are excellent options for business owners who need more immediate cash flow or are facing a spike in sales. When looking for a purchase order or invoice factoring company, be sure you find a company that: ● Is attentive to detail. ● Has a high rate of success among customers. ● Is efficient. This is never more important than during the rush of holiday sales when speed, efficiency, and customer satisfaction help maintain cash flow. The holiday/winter season can be a win for your business if you prepare well ahead of time and maintain your cash flow. Employing these strategies will help small- mid-sized businesses navigate the end of the year with confidence and begin the new year from a place of prosperity. Looking to maintain cash flow for your small business during the holiday season? 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.  Navigating financial partnerships, investments, and agreements is a regular part of being a small business owner; however, navigating these relationships well and finding partners you can trust can be challenging.
In this article, we will cover what to look for when seeking trustworthy capital providers for your business. Excellent communication “Effective teamwork begins and ends with good communication.” —Mike Krzyzewski Communication is key to success in any venture, but especially in business. From the first point of contact with a company, you should evaluate their communication.
First impressions are important, a company that puts forth the effort to make a positive first impression is more likely to put that same effort into a business relationship. Since 1993, Prairie Business Credit has served as both a trusted financial resource and consultant to entrepreneurs, building strong relationships and focusing on helping each business succeed. A good reputation with their customers “Character is like a tree and reputation like its shadow.” —Abraham Lincoln Businesses with strong character cast a long shadow. When looking for a company to partner with, look for one that has an excellent reputation with their customers and is known for:
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. Attention to detail “It’s attention to detail that makes the difference between average and stunning.” —Francis Atterbury Small business owners know that the secret to success and happy customers is to pay attention to the details. You spend hours of your life making sure the details of your business represent your passion for your work and the high quality you strive for. You want the same quality in a financial partnership. Look for someone who:
Prairie Business Credit is a privately run company, which means we are able to give you personal attention, unlike other large financial institutions. In our decades of business, we have helped over 70 percent of our clients progress to bank or self-financing. You put your heart, soul, and dreams into your business. When looking for financing options, look for a company with the same values in good communication, quality reputation, and attention to detail that you have. At Prairie Business Credit, we strive to put our customers first and help them reach their goals, and our customers are enjoying the results. Hear from our customers: Boyd Miller, Wisconsin Thermoset Plastic, Milwaukee, WI, shared that his company faced a massive drop in sales and was unable to get help from the bank, which directed him to Prairie Business Credit. Miller said, “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." Joe Krippelz, Jake’s Inc. Precision Machining and Rebuilding, Aurora, IL, said that after the economic downturn, their bank relationship changed—they needed cash to meet their customers’ needs. He said, “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." Looking for a trusted capital provider for your small 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.  There are 33.2 million small businesses in the US, and small businesses have helped create 17.3 million new jobs over the past 26 years. Small business ventures are a long-honored part of the American dream, but how do you get started?
In this article, we will share ten steps to help you get your small business started today. 1. Research. Market research is vital before you put any action or money toward a business. You may have a neat idea, but is there a market for it? Can you connect your products or services with the customers who need them? Does your business make sense financially? Talk to successful business owners, financial consultants, and mentors with real-life experience in the marketplace who can advise you. 2. Make a business plan. A business plan is the road map you will follow to make your business successful. Within the first year, nearly 22 percent of small businesses fail, and this can be the result of a poor business plan. Your business plan needs to outline your goals for your business, and what strategies you will employ to reach those goals. A business plan will also be necessary to pitch your business to investors or funding partners. 3. Get funding. With a solid business plan, you can begin looking for funding. Funding is a make-or-break step for starting a business. Small business loans are one way to get funding, but many traditional banks will not give a loan to a business without a financial history (something startups do not have). Finding private investors is another way. Lines of credit with a credit card or a community development financial institution (CDFI) may also be options depending on your business type and goals. Some types of small business startups can use invoice factoring or 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, while invoice factoring is when a business sells its accounts receivable to an invoice factoring firm. 4. Pick your location. Whether you have a physical brick-and-mortar location or you are online-based, where you locate your business will impact your revenue, marketing approach, and legal requirements. Carefully research what location will best serve your business goals. 5. Choose your business structure. How you legally structure your business will impact your registration requirements, liability, taxes, and more. Starting on the right foot with your legal structure will save time and money in the future. 6. Choose a business name. Your business name is likely to be the first point of contact a potential customer or client has with your business, select a name that reflects your brand and your passion. You will also want to pick a name not currently used by someone else or is already strongly associated with another brand. 7. Register your business. Once you have picked a business name, register to protect it from competitors. This is an important part of establishing your brand identity and gaining legal status and benefits. 8. Get federal and state IDs. Registering officially with the state and federal governments is a big step forward starting and growing your business. Your employer identification number (EIN) is what you will use to open a business bank account or pay your taxes. 9. Apply for the necessary licenses and permits. The number of legally required licenses and permits will vary depending upon your state, whether you are online or brick-and-mortar, and what type of products or services you offer. Failing to procure all licenses and permits can create obstacles and issues you do not want to face when getting your business off the ground, so be thorough. 10. Open a business bank account. Open a bank account for your business that is separate from your personal account. A small business checking account can help you handle legal, tax, and day-to-day issues. Starting a small business isn’t easy, but it can be rewarding. Follow these ten steps to begin down the path to becoming a successful small business owner. Looking for financing options for your new small 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.  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:
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.  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:
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:
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:
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:
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:
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.  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.
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:
The cons:
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:
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:
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. |
Topics
Purchase Order Financing and Factoring How Does Factoring Work? Calculating the Benefits of Factoring When Should You Consider Factoring? Factoring in Five Simple Steps 13 Week Cash Flow Forecast Businesses Need to Protect Their Cash Flow During the Pandemic The Cash Gap Our Second Client Defrauded Us - How it Changed the Way We Do Business Is Prairie Business Credit Expensive? How Much Do They Charge? Top Ten Reasons to Factor You Need Cash for Growth Who are Good Candidates for Factoring? Our Number One Goal is that Our Clients Leave Us A Bridge to Where? In the Age of the Internet, We Still Do Business Face to Face Credit Checks Cash Management Two Fundamental Principles When Giving Your Customers Payment Terms Team Up with a Factor To Earn Lifelong Business Customers Make No Little Plans Prairie Business Credit Promotes Morgan Prairie Business Credit Promotes Diversey Categories |
RSS Feed
