Purchase Order and Trade Finance
Trade finance works by reconciling the different requirements of an exporter and importer to ensure a transaction can be easily made by both parties. Bridging the gap is what allows trade to flourish. An exporter might prefer to be paid upfront by the importer for a shipment of goods, the importer faces the possibility that the exporter may simply keep the payment without sending the merchandise. On the other hand, if the exporter extends credit to the importer, the latter may refuse to make good on the payment.
A solution to this difficulty is through issuing a letter of credit which is opened in the exporter’s name by the importer through a bank in his home country. The letter of credit essentially guarantees payment to the exporter by the bank issuing the letter of credit upon proof goods have been shipped.
At Mission Valley Capital we can deliver purchase order funding for import/export, or domestic fabrication of pre-sold merchandise. We find that in many cases a company’s greatest test is not sales or production, but actually locating the financing to acquire pre-sold goods.
We can provide production finance for work in process and Letters of Credit for trade finance, including import and export transactions as well as domestic trade purchases. If you are a producer, distributor, wholesaler or reseller of manufactured products we can help. Even if you are a start-up, have poor cash flow, or little access to capital we can help get you to attaining your objectives.
The Benefits of Purchase Order Financing:
- Allows companies to grow without increased bank debt or selling equity
- Helps ensure timely deliveries to customers
- Increases market share
- Allows companies to make larger profits by fulfilling larger orders
- Fast flexible funding
Banks and all traditional lenders have regulatory bodies that govern them with strict underwriting criteria that can be extremely prohibitive to getting started. Usually collateral is required and at least 3 years of financial documents. They need evidence you will be able to handle an increase of business. Banks already need you to be successful in order to lend. We’ll get you to the level where your success will speak for itself.
Call Mission Valley Capital today and speak to one of the partners about Purchase Order Financing for your business. Our goal is to understand your needs and provide a streamlines solution that makes sense for everyone involved.