| FINANCIAL BUSINESS PURCHASE ORDERS |
| Financing business purchase orders
works much the same way as factoring (click back to read that section
first) but adds a few complicating factors. A receivable is created once
you deliver a product or service to your client. The work is completed
and only needs to be paid for. The only risk is your client's creditworthiness. In financing purchase orders, your past performance becomes an issue. Will you deliver the product per the client's specifications and on time? What other complications might arise? Your request here is for the financing company to step forward and advance the money for you to produce a product that has been ordered by another company. All you are bringing to the table is the order and the delivery system. The lender is assuming all financial risk. |
