Collaborate on Purchase Orders and Invoices for Small Businesses with Ease Using airSlate SignNow

Purchase orders and invoices for small businesses

so you landed a big order and you need to get it funded I completely get it in this video I'm going to share everything you need to know in 2023 in order to get purchase order financing so you can secure that order and grow and scale your business [Music] purchase order funding can be a really great tool to grow and scale your business there's really like just over a handful of lenders that really do this well and more importantly actually fund the deal so that's important to know don't worry all those lenders are on my platform with purchase order funding you can use it as a pre-revenue company so if you've got like a great deal an agreement from you know a bigger business to go out and purchase product in order to deliver it to let's say Walmart or Target assuming they're the buyer and then get paid on it you can actually go and execute and do that or let's just say all of a sudden you got the biggest order of your lifetime and you don't have the money to go and do that and you're like man if I only had a half a million bucks or a million bucks to go and buy all this product I can make a ton of money on this deal well that's when you want to use purchase order funding what you need to understand is a few things one is purchase order lenders want to understand what are the products that you're purchasing and if they get stuck with these products you know can they receive sell them so they want them to be some sort of typical products not like a big one you know giant thing that's very expensive that's just not easy to you know sell in the event something goes wrong but just typical products that are used every day are easy to sell on the market so the main thing is you've got a big order and you need to get it funded so first off the purchase order lender is going to want to understand where are you buying the goods from is it overseas or is it local you can buy them overseas it's fine but wherever you're buying it from that vendor will have to be verified it'll have to be a good good standing vendor that has a good background second thing is they're going to want to understand the cycle of your purchase meaning when you go and give that vendor the money how long does it take you to get those goods most purchase order lenders don't really want to be out there for more than 90 days maybe 120 days so your sales cycle needs to really match that second they're going to really want to understand that you know you're doing and you've done this before or what you're doing really makes sense meaning that it's a good vendor the company buying your product is a big good well-known company and everything kind of makes sense with a purchase order funder they're going to go and give you the money and they're going to pay directly to that vendor to go buy your product they'll take ownership of that product as that product gets shipped and then what happens is when that product lands at let's just say Walmart for instance what they're going to want is they're going to want you to have an account receivable or a factor lender in place because when you now get that product to Walmart the purchase order lender is going to want to get paid off so that product you let's say you bought from China it gets shipped to Walmart now Walmart has it you invoice Walmart for that product now that res that invoice can be factored the purchase order lender usually works hand in hand with a factoring lender so when you get that invoice to Walmart the factor will now pay it off the purchase order will will be made whole and now the factor will be in place and that factor will wait to get paid from Walmart directly so now that I went over the whole flow what's also important to understand is that when you work with the purchase order lender there's going to be a charge to that cost of capital it can be anywhere from one to two to three percent per month uh forever however long that money is outstanding so if it's a 30-day cycle 45 day 60 day cycle every purchase order lender will work a little bit differently some will charge you every five days 15 days or 30 days but there will be a total cost per month that that money is outstanding and then when that money hits the uh the buyer in this case we used Walmart you'll invoice Walmart that invoice will be paid off by a factor then that factor will charge you a rate per month until Walmart pays their bill right so what you need to understand when you're doing one of these deals is what is the cost per month from the purchase order lender and what is the cost from the fact or lender you just want to make sure that your margins make sense meaning that whatever you're buying your goods for and selling it for that your return on investment is there and can afford paying the lenders but don't get caught up in the cost of capital get caught up in how much money can you make by doing one of these deals and some of the biggest companies in the world brand names that you would know of utilize factors and purchase order lenders to grow and scale their business and the other reality is in order to grow and scale you need money whether it's your own money whether it's private Equity money or a lending a partner you're going to need money to grow and scale Beyond where you are or you can just grow organically much slower the option is really yours but usually if your numbers make sense by not pulling in a financing partner purchase order lender Factor you actually could be losing money because by not doing a deal by not growing and scaling your business how much money you're losing or leaving on the table by not having the right financing Partners in place so having the right financing Partners in place is super important and is a very important way to grow and scale your business without having to give up Equity hope you found this video helpful I know there's a lot of moving Parts here if you lost me if you have questions drop some comments below I'm happy to answer them and obviously if you have more questions check out that link below get connected with my team and they're happy to help talk through what purchase order financing can look like when working with us thanks for tuning to grow by Joe keep learning keep growing keep doing what you're doing in your business take care [Music]