by ARTIS COMMERCIAL CAPITAL | Aug 22, 2023 | Blog
Purchase order financing is a type of short-term funding that enables businesses to purchase goods or services from suppliers without requiring the immediate payment of cash. It can be an invaluable source of capital when used correctly, allowing business owners to grow their companies quickly and efficiently.
The Basics of Purchase Order Financing
When it comes to the specifics of PO financing, there are a few key components to consider. For starters, the process begins when a business places an order with one of its suppliers and needs capital in order to pay for it. The business then contacts a purchase order finance company which will review their application and determine if they’re eligible for funding. If approved, the finance company will provide the upfront cash necessary to cover the cost of the goods or services being purchased from the supplier. Once these have been delivered, the finance company will take back their money plus any additional fees incurred during the process (such as transactional fees or interest).
When to Use PO Financing
PO financing is typically only available to businesses with at least several months of good sales history and a solid credit score. That being said, it can be an extremely helpful tool for companies experiencing cash flow issues or looking to take advantage of large orders that they would otherwise have difficulty paying for in the short term. Additionally, PO financing can be used by small businesses to take on larger client accounts and use the revenue from those sales to achieve rapid growth.
All in all, purchase order financing can be a great option for businesses that find themselves in need of short-term capital for large orders. With the right finance company on your side, you can ensure that your suppliers are paid on time and take advantage of the growth opportunities available to you. Contact Artis Commercial Capital to learn more about our comprehensive purchase order financing solutions.
by ARTIS COMMERCIAL CAPITAL | Aug 15, 2023 | Blog
For small business owners, the fear of bad debt can be a major concern. After all, if you don’t get paid for your services or products, it could spell disaster for your bottom line. Fortunately, invoice factoring is an excellent tool that can help protect your company from taking on bad debt and even improve cash flow in the process. Invoice factoring involves selling unpaid customer invoices to a third-party lender at a discount in exchange for immediate payment.
Understanding the Basics of Invoice Factoring
First, it’s important to understand the basics of invoice factoring. When you factor invoices, you receive an advance payment for your unpaid customer invoices. This means that instead of waiting 30, 60 or even 90 days or more for customers to pay their bills, you can get paid right away. The lender will then collect payments directly from your customers, allowing you to focus on running your business instead of chasing down overdue payments.
Research Factoring Services
Next, when using invoice factoring to protect yourself from bad debt, it’s important to make sure the company you are working with is reputable and honest. Research online reviews and compare rates and fees between lenders before making a decision. Additionally, it’s important to consider the creditworthiness of your customers. The more reliable and financially sound they are, the less risk you will have with invoice factoring.
Establish Clear Payment Terms
Finally, it’s a good idea to set up clear terms of payment with your customers. This will minimize the chances that they will default on their payments and leave you carrying the cost. Clearly stating payment due dates and outlining any late fees or penalties can help ensure that your invoices stay current and improve your chances of avoiding bad debt.
By understanding how to use invoice factoring properly, small business owners can protect themselves from taking on bad debt while maximizing profits in the process. Contact Artis Commercial Capital today to start factoring your invoices.
by ARTIS COMMERCIAL CAPITAL | Aug 8, 2023 | Blog
In today’s highly competitive business environment, small businesses must find ways to stay ahead of the competition. One way they can do this is by using purchase order financing (POF). POF enables small businesses to fund their orders so that they can take on larger orders without straining their resources. By taking advantage of POF, small businesses are able to compete with larger companies and expand their market share.
Financing for Large Orders
Purchase order financing offers small businesses quick access to capital that can be used to fund large orders. It allows them to acquire inventory, meet customer demands, and increase production in a timely manner. This type of funding also eliminates cash flow concerns around the purchase of larger orders, as funds are provided upfront for goods and services. Additionally, it helps free up working capital, allowing businesses to focus on expanding their operations and reaching out to new customers.
No Collateral Required
One of the biggest advantages of purchase order financing is that it does not require a personal guarantee or collateral from the business owner. This helps them avoid putting their own assets at risk while still being able to access larger orders. Furthermore, POF can be used for many different types of orders, including goods and services. This makes it a great option for businesses that are looking to expand their product offerings and services.
Reduce Costs
Lastly, purchase order financing can help small businesses reduce costs associated with acquiring inventory or producing goods. By taking advantage of this form of funding, businesses can access the capital they need quickly and easily while keeping their expenses low. In turn, this helps them to remain competitive in the market and expand their operations.
Overall, purchase order financing is a great way for small businesses to access capital quickly and easily without putting their own assets at risk. By taking advantage of this type of funding, they can compete with larger companies, increase their market share, reduce costs associated with acquiring inventory or producing goods, and free up working capital. This makes POF an ideal tool for small businesses that are looking to expand their operations and reach out to new customers. Contact Artis Commercial Capital today to start using purchase order financing for your business.
by ARTIS COMMERCIAL CAPITAL | Jul 25, 2023 | Blog
Asset-based lines of credit provide a great opportunity for businesses to access working capital while managing their cash flow. This type of financing can be especially beneficial for small and growing businesses that need additional funds to expand operations or purchase equipment. Asset-based lines of credit are also attractive because they offer more flexibility than traditional loans, allowing borrowers to draw from the line as needed and pay back only what is borrowed.
How Asset-Based Lines of Credit Work
When businesses take out asset-based lines of credit, they are essentially borrowing against their assets. This includes inventory and accounts receivable, as well as equipment or real estate. The line of credit is secured by these assets, which gives lenders more comfort because they know that if the borrower defaults on the loan, the lender can seize the collateral in order to recoup its losses. This type of financing is attractive to lenders because it’s a low-risk loan, and they typically offer competitive interest rates due to the security offered by the collateral.
More Financing than Traditional Loans
Asset-based lines of credit also allow businesses to access much larger sums than traditional loans. The line of credit amount is usually based on the value of the assets being used as collateral, so businesses can borrow up to 80-90% of the value of those assets. This provides businesses with more working capital and helps them cover costs associated with growth, such as purchasing inventory or investing in new equipment.
Better Cash Flow Management
Finally, asset-based lines of credit provide companies with flexibility when it comes to managing their cash flow. Since the line of credit is not a fixed amount like a traditional loan, businesses can draw from the line as needed and pay back only what is borrowed. This allows them to access additional working capital quickly when it’s needed, without having to make large lump-sum payments.
Asset-based lines of credit are an attractive option for many small and growing businesses looking for extra funds to capitalize on growth opportunities. They offer more competitive interest rates than traditional loans, as well as the flexibility to access larger sums of working capital. Plus, businesses can use their assets as collateral and benefit from the ability to draw from the line and pay back only what is borrowed. If your business is looking for a way to finance growth without sacrificing financial stability, contact Artis Commercial Capital and learn about our asset-based financing solutions.
by ARTIS COMMERCIAL CAPITAL | Jul 18, 2023 | Blog
Asset-based financing is a great way to fund your business without having to take on additional debt. It involves using your existing assets, such as inventory or accounts receivable, as collateral for loans from banks and other lenders. This type of financing can help you meet short-term liquidity needs and provide the capital required to grow your business. There are several different types of asset-based financing available, each with its own unique set of benefits and risks.
Secured Loans
Secured loans are a type of asset-based financing that involve putting up your business’s assets, such as inventory or equipment, as collateral for the loan. This reduces the risk to the lender since they can repossess and sell the asset if you default on the loan. The biggest advantage of secured loans is that they typically offer lower interest rates than other forms of financing. However, this type of financing also carries some risks; if you default on the loan, you could lose your asset.
Invoice Financing
Invoice financing is another form of asset-based financing in which a lender provides funds based on money owed to your business by customers or clients. The lender will advance you a percentage of the total amount owed and hold the remainder until it is paid in full. This type of financing is great for businesses with steady sales but cash flow problems, as you can access the money right away without having to wait for customers to pay their invoices.
Factoring
Factoring is similar to invoice financing in that it provides funds based on money owed by customers or clients. However, with factoring, the lender typically takes possession of your accounts receivable and collects payments from your customers directly. This reduces the risk to you since you won’t have to worry about collecting payments yourself. However, it also means that there may be less flexibility when negotiating terms with your lender.
These are just some of the asset-based financing options available to you. Each has its own set of benefits and risks, so it’s important to carefully consider which option is best for your unique situation. Before taking out any type of loan, make sure you understand the terms and conditions associated with it so that you can be sure it will meet your business’s needs.
Asset-based financing can provide a great source of capital for businesses looking to grow or cover short-term liquidity needs. By understanding the different types available and considering their advantages and disadvantages, you can choose the one that best fits your business’s needs and goals. With careful planning, asset-based financing can help take your business to the next level. Contact Artis Commercial Capital today to explore our asset-based solutions, and learn how they can help your business.
