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Purchase Order Financing vs. Invoice Factoring

Posted by in Invoice Factoring, Purchase Order Financing

Purchase order financing and invoice factoring are both designed to aid businesses whose sales exceed incoming revenues. But the way each manages cash flow is different.

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Below, we take a look into what sets them apart:

Purchase order financing provides the necessary working capital for your business when you have sales orders but need the money to fulfill the transaction. RMP Capital will fund your purchasing needs so you can complete your sale to your customer. Purchase order financing is the ideal solution for short-term funding requirements with creditworthy customers.

One way to use purchase order financing is for purchasing or manufacturing goods that have already been sold. We’ll issue letters of credit or provide funds that allow your business to secure the inventory it needs. Many types of businesses can take advantage of this financing but we find that the most common are:

  • Manufacturers
  • Distributors
  • Importers
  • Exporters

Watch our animated video to learn more about purchase order financing:

Invoice factoring, on the other hand, is more like a loan designed to bridge the gap between product or service delivery and payment of invoices. It’s perfect for companies that have already sold goods or services but haven’t yet received payment.

Through invoice factoring, RMP Capital helps small- and medium-sized businesses grow to their full potential. This type of funding allows you to receive immediate cash for products sold or services rendered on a daily basis. What can you do with the extra money?

  • Grow your business
  • Fund new lines of products or services
  • Create supplier leverage
  • Obtain vendor discounts
  • Take advantage of cash buying opportunities

For more information, watch our video:

For help deciding which type of funding is right for your business, give RMP Capital a call today at 631.738.0047. For more tips, find us on Facebook, Twitter, YouTube and LinkedIn.

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