Ever dreamed of that bug sales? You know the one I am talking about, the one that would put your company on the map in your industry as a player. Be careful for what you wish for. Many companies have wished for that very thing until it actually happens. What would you do if you received that order and it was for more than you entire last 2 yeas of sales in one Purchase Order?
This exact thing happened to a Telecom Distribution Company in New York State, USA. They went from sales of the last 2 years of nearly $600,000 to an order of $650,000 in one shot. Their Line of Credit was for $200,000 so the owner of the company promptly went to the bank to get it increased so he could take the order. I am sure you already know what happened. He was denied the increase in credit.
The customer in this case had to have 30 day terms on the invoice. To make it worse, the suppliers needed to be paid before they would ship the goods. Big problem. If you look at a 10 day delivery time on top of the 30 day sale terms, he would have 40 long days that needs to be gapped. With the though of having to refuse the order in your mind, consider this. What if there were a way to finance this gap in funding that would not involve major financial statements, appraisals and other types of documents?
The owner of the company did speak with some Accounts Receivable Factoring Companies but they were not able to help out due to the time lag between the timing of the advance requirement and the delivery of the goods to the customer. They could not Factor the Accounts Receivable until the product was delivered, and they could not deliver the product until they received an advance to pay for the product.
Through the use of a Commercial Finance Broker, a facility for Purchase Order Finance and Accounts Receivable Factoring was created. The order was able to be accepted which opened the door for future order from this customer and others just like them. - 31384
This exact thing happened to a Telecom Distribution Company in New York State, USA. They went from sales of the last 2 years of nearly $600,000 to an order of $650,000 in one shot. Their Line of Credit was for $200,000 so the owner of the company promptly went to the bank to get it increased so he could take the order. I am sure you already know what happened. He was denied the increase in credit.
The customer in this case had to have 30 day terms on the invoice. To make it worse, the suppliers needed to be paid before they would ship the goods. Big problem. If you look at a 10 day delivery time on top of the 30 day sale terms, he would have 40 long days that needs to be gapped. With the though of having to refuse the order in your mind, consider this. What if there were a way to finance this gap in funding that would not involve major financial statements, appraisals and other types of documents?
The owner of the company did speak with some Accounts Receivable Factoring Companies but they were not able to help out due to the time lag between the timing of the advance requirement and the delivery of the goods to the customer. They could not Factor the Accounts Receivable until the product was delivered, and they could not deliver the product until they received an advance to pay for the product.
Through the use of a Commercial Finance Broker, a facility for Purchase Order Finance and Accounts Receivable Factoring was created. The order was able to be accepted which opened the door for future order from this customer and others just like them. - 31384
About the Author:
Wade Henderson - very Professional - 15 yrs in the Business Finance Field - reputation for getting the deal done. IMMFinancial.com factoring association accounts receivable outsourcing
