The Top Three Benefits You can Get from a Purchase Finance Service

Any business manager and business owner will tell you the same thing: cashflow is the most important aspect in any enterprise, regardless of what business the institution is in. Cashflow is created by the payment of services rendered or goods sold and services acquired or goods bought. A positive cashflow is good, whilst a negative cashflow means that the business may be losing money.

Unfortunately, every business struggles with cashflow now and again; every enterprise is sometimes in a position where they can’t meet orders simply because the money that is owed to them hasn’t been paid yet. Such situations occur more often than you might think. That’s why there are purchase financing services – to help manage cashflow and allow businesses to grow even during times of tight cashflow. But what exactly is a purchase finance service? What does it do, and what are the benefits? Here is a quick round-up.

Purchasing finance

As soon as you receive an order (and accept it) a contract is made – be it verbal or on paper. This contract creates debt – a debt you have to pay in the form of delivering goods or services, and a debt your customer has to pay financially. With a purchasing finance option, you can receive money in advance on the financial debt your customer owes you. In other words, you can get an advance on the money you would normally receive after you have completed your part of the contract. The amount you receive in advance depends on the amount of the invoice you create for your customer.

The top three benefits

• Get those large orders! Even though you may not have the necessary funds at present, you can accept large or many orders because you know that with the advance money paid to you, you can fulfill those orders.

• Flexibility to your situation. Unlike banks, purchasing finance services look at your unique situation and adjust to your business. These financing services don’t look at your records per se, but consider the creditworthiness of your customer or client, the reliability of your suppliers, and the possible risk unique to each situation.

• Easy availability. Purchasing finance services have less stringent requirements than banks and deploy their programmes quickly. Furthermore, most agreements are reached very quickly and funds can be transferred in a matter of days.

The days that you have to turn down orders simply because you don’t have the financial means at present to fulfill those orders are over – thanks to purchase finance services and other related trade finance services. Not only does this type of service allow you to continue your business as usual – it actually gives you the opportunity to go out there, get those big orders, and grow.

Image attributed to Stuart Miles/FreeDigitalPhotos.net

Categories: General