Trade Financing Helps Your Business Conserve Capital

You’ve just received a jaw-dropping order for your products. Wonderful! Now, how are you going to fund this revenue windfall? You could pay cash for the products you’ve sold, but you’d deplete your capital.

Trade financing may be your best option to conserve precious cash and fund this huge order. You have multiple trade financing options. Understanding what they are and how they work helps your fulfill massive orders.

Purchase Order Financing

PO financing can be a lifesaver when you have insufficient cash to fulfill large orders. Although some banks offer this product, there are private lenders who offer PO financing with more liberal terms. Most of these non-bank lenders depend on the financial strength of your customers, not your company financial position.

Accounts Receivable Financing

AR financing is equally popular. Unless your customers pay cash at the time of purchase, your company has AR (money owed to you for products sold). You offer your AR as collateral for this financing. Depending on your AR “aging,” lenders discount the value of your receivables, the oldest having the least value.


Similar to AR financing, factoring includes one major difference. The “factor” actually buys your accounts receivable, paying you cash for them. While you won’t get close to 100 percent of your AR value, factors focus on the ability of your customers to pay, not your company strength.

Understand that you might consider all of these trade financing options as “expensive.” But, you’ll get your cash fast and fulfill even the largest orders. The Carleton Group can help you get trade financing when you need it. Contact The Carleton Group to learn about your best trade financing options.