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Purchase-Order Financing:

There are other ways to get your store orders manufactured without using your own money up front. In this article we will discuss one of them. Purchase Order Financing is short term funding used to finance the purchase or manufacture of specific goods. Basically meaning if u just attended a trade show (magic, aaeshow, alpha) and have an abundance of orders or at least $10,000 worth the more the better interest rate. U can attain cash by using your purchase orders from credit worthy store accounts and they will give u the money to finance the orders up front. U than pay your manufacturer and ship your product to stores. The store in return pays the financing company and they (the company) will cut your check (profit) minus the interest u owe them. It?s a very simple process and not a lot of paper work and best of all there is no business credit check or personal credit check on your end. As long as you have quality stores with a proven track record buying your product with a proven history (open longer than 6mths to a year) you will most likely qualify. Interest rates vary between companies depending on the loan amount the more the better and the risk their taking with the stores you?re retailing in.

Why Use Purchase Order Financing or Factoring: Do you really need to ask this question?:

Do you really need to ask this question?

1. Seize market opportunities?A lot of times there is just not enough cash flow too jump on an opportunity that arises out of nowhere. Believe these times will come and you will not be ready!(purchase order financing)
2. Your company may not qualify for traditional funding: Meaning most banks will not take a chance on you. 1. No credit 2. Negative business net worth 3. New businesses usually have a history of losses.
3. Who can benefit from purchase-order financing?
4. Any Apparel business with written orders from a qualified store
   Check out the net for more info on purchase-order financing!

Over-Coming Cash Flow problems using FACTORING as a alternative:

For example let?s say u have already paid your manufacturer for the goods and services rendered, but your cash-flow is short due to production (use factoring). When running an apparel business you have to promote, execute fashion shows, and promote some more. Those things are important in building your brand and they also require cash in hand (use factoring). Most manufacturers (you) work out payments with stores net-30 sometimes net-45 or whatever. Meanwhile your waiting too be paid but you have other obligations (promoting, fashion shows). That?s where Factoring comes into play meaning essentially the sale or financing of invoices (money owed by your retailers). A company can either wait for a retailer to pay (no cash-flow at hand) offer a discount to get them to pay earlier (cut into your profit) or finance the invoices (Factoring). They will front your money based off your invoices usually pay u 70% to 80% of the total of your invoices and will in return charge a interest usually around 4% depends on the creditworthiness of your retail accounts. It also works as a collection agency for you because your store accounts are now in the hands of your factor and the stores pay them and you just receive papers to be filed. The good thing is u can use factoring again and it won?t affect your credit or the financial standing of your business. Some banks even have factoring divisions, but usually carry more stipulations than factoring companies.

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