Sales Growth vs. Cash Flow Dilemma Does Purchase Order & Trade Finance Fit Your Needs?

Purchase Order Finance
What Are Your Options?

Since prospective clients generally have an existing relationship with a senior lender (bank, finance company or factor, etc.), our first recommendation is to review their needs with their senior lender. If they can satisfy your funding needs, the finance solution may be less costly than other available financing options.

But for numerous reasons, your senior lender may be unable to provide the required funds. The most common reasons are formula, cap, or covenant issues. When you exceed or stretch these parameters, most senior lenders are forced or choose to draw the line.

It may also have nothing to do with your standing or account status. In uncertain economic times, banks tighten credit to reduce their debt exposure, making obtaining capital even more difficult for middle market companies.

Assuming you have already unsuccessfully approached your senior lender. You do have a few financing options:

• Give Up Equity In Your Company
  Most entrepreneurs cringe at the idea of giving up a piece of their company, especially for what may be a short term need. In addition to control issues, the value of your company may appreciate considerably. Thus, giving up equity in your company for what might be a temporary cash flow problem may be a decision you regret in years to come.
   
• Mezzanine Debt
  Typically more expensive than purchase order and trade finance programs, mezzanine debt is a longer-term solution than you may need or want. Many companies only need additional lending facilities for short periods of time (30 to 60 days). Mezzanine programs can extend out to 12 to 24 month period or more. Typically, equity kickers are tied to the programs as well, making mezzanine debt more costly than other solutions to your situation.
   
• Purchase Order Finance
  Often less costly and more flexible than mezzanine debt and probably much more attractive than giving up an equity stake in your company, our services offer the perfect solution to your financing needs - providing you the necessary funds to take advantage of all sales opportunities.

Our clients view us as a temporary partner in sales and profits. As such, we share in the performance risks and related results, while we help facilitate the process. We understand it's your job to make the transactions a success. Once the sales transactions are completed, we're out of your life.
It’s your business.