Paragon Financial Group is funding during the COVID-19 crisis.

Financing Your Printing Company With Purchase Order Funding

Finance Your Printing Company With PO FundingPurchase order funding is one option for businesses looking to finance their printing company. Debt is another. There are, however, several difficulties associated with using debt to raise capital. For one, it generates a burden because it has to be paid back. Every month (or whatever the agreement) businesses have to come up with ways to ensure that they can repay what they owe. Purchase order funding or PO Funding is a great way to improve a company’s cash flow. PO Funding is far less problematic than a loan and allows companies to produce capital extremely fast.

Besides the disadvantage of taking on new debt, bank loans are also challenging to qualify. Companies that have poor credit or those that are new in the business have the worst time. Today, it is even tougher for established companies with decent credit ratings to find a bank that will loan them money. Banks have suddenly become very stingy.

Purchase order financing is an alternative way that has been around for some time. However, for some reason, has been underutilized. That is quickly changing. As companies are finding that it is impossible to raise money via traditional methods, that is bank loans; they are turning to Factors and PO financing.

Purchase order financing could save the day for a printing company that struggles from cash flow issues to quickly raise capital to pay for the supplies necessary to fulfill a large order. For example, let’s say that Printing Company XYZ receives a $1million printing order from the Center High School District, but does not have the money to purchase enough ink to print out all of the agreed-upon documents on their printers.

Under normal circumstances, they might approach a bank and apply for a loan, but these days, the banks aren’t even willing to accept their application. A sympathetic fellow business owner suggests that they contact a Factor. They do and find out that the Factor is willing to give them a line of credit so that they can purchase the ink, in exchange for them paying them back after they receive payment from the Center High School District, plus 1% of the profits. Relieved that they can fulfill the contract, Printing Company XYZ gladly accepts and keeps Printing Company XYZ’s phone number on speed dial.

The above is an example of a purchase order funding in action. A Factor opens up a line of credit so that a business can secure the materials they need to fulfill a specific job. The factoring company is then paid back the money they spent on the supplies. In addition, a percentage of the profits from the sale after the collection of the invoice. This might be a great commercial financing option for a printing company. Also many other types of businesses for that matter. It allows them to get the money they need to pay their suppliers and fulfill orders that will infuse much-needed capital into their businesses. Invoice funding is a fast, simple and effective way to improve a company’s cash flow. As a result, they can continue operating even with little available cash-on-hand.

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Financing Your Printing Company With Purchase Order Funding

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