Explosive order growth puts pressure on working capital
It starts right from the moment you get the order. On this basis, you have to start buying and/or producing (or having produced). The costs therefore precede the benefits. If the growth in orders then explodes, the available working capital will be insufficient to finance this procurement.
Financing procurement offers solutions
Advancing debtor positions (via factoring) can be a solution. Sometimes more is needed and procurement needs to be financed. This is easier said than done as most factoring companies do not yet offer sufficient solutions for this. But under the pressure of an increasing need for procurement financing, more and more options are emerging. However, it is often the case that only the purchase of orders already received is financed.
Procurement finance benefits
Slowly, new financiers are emerging that focus purely on procurement finance. Procurement finance has the following advantages:
- Improve working capital as your procurement is funded for up to 120 days;
- Collateral is not always needed;
- Existing credit lines can remain intact;
- Buy directly from suppliers on good terms (as supplier gets money directly);
- No ongoing obligations: for each purchase and supplier, you choose whether you want to be pre-financed;
Are you curious about the possibilities of procurement financing for you? Then contact us at info@xolv.nl or 073 - 820 02 95. Our specialists will be happy to talk to you.
