Search US website

money advance against purchase orders

I’m a new small start up company. Have meet with Lowes and Ace at end of month. I believe Lowes terms are NET 90. How does a small company cover manufacturing and supply cost when suppliers are NET 30?

3 Responses

  • Jul 13, 2010

    Financier

    Purchase order financing is a specialized financing solution where money is advanced typically to a distributor for the acquisition of finished goods which are to resold by the distributor. It is also possible to get advances for funding labor and materials needed to manufacture goods, although its a bit more complicated. If you would like to explore the details of your transaction and needs, please contact me.
    Regards
    John Adler
    Cash Flow Financial
    214.432.4479

  • Jul 22, 2010

    Julie Rains

    You could consider a line of credit to cover the gap (30 versus 90 days), which seems extreme but apparently is becoming more common. You could also try negotiating different terms with your suppliers. If you can pay with a charge card, you could take advantage of the grace period without incurring interest charges -- just make sure you have the funds lined up when the payment is due.

    I'd also make sure that there were no surprises at the end of 90 days -- that is, that you've adhered to all of their requirements, not just for product but for packaging, labeling, shipping windows, etc. and that your vendor account is properly set-up in the account's A/R system well before the due date.

  • Aug 26, 2010

    CEO

    This can always be a problem for a small company and we found that the best way to do it is to sell your invoices to a reputable discounter. Basically they pay you a percentage (80-90%) of the invoice right away and you pay a percentage fee for getting your money early. Make sure you only sell the invoices you need to as this can be costly if you sell all your invoices...........good luck...........Larry

What do you think?

Related topics