Purchase Order Financing For Scrap Dealers

Well if you have just got a huge order which allows you to expand your current scrap business but you do not have sufficient capital to execute the same, then Purchase Order Financing should be a good rescue. Many times scrap dealers dealing in scrap metal, scrap plastic, scrap rubber, scrap paper and other types of scrap find themselves in such a situation. Why is it so? Due to the nature of this business many times a scrap dealers need to pay in advance before the transaction is settles to get the capital and the profit back to them. To be a renowned name in the scrap business you should be able to handle all types of orders no matter how big they are. This is what helps you build your reputation and gain more business. Now to maintain this perennial supply you need an easy and quick way to get you the required money. Bank loans do not work out to be the best options in this case due to the formalities involved in their procedures and a considerable wait period before the actual capital is given to the scrap dealer. Now Purchase order Financing is something that is more reliable and gives you a better chance of obtaining money quickly. Purchase order lending works because it is based on the credibility and financial soundness of the end customer who places the purchase order. So you do not have to think about the long procedures and formalities before sealing a good deal which can earn you good profits. I am sure as a scrap dealer would like to know how purchase order financing works in a few simple steps.

• Step 1 - Get a purchase order for any type of scrap viz. scrap metal, plastic scrap, scrap electronics, scrap paper, etc, from your customer.

• Step 2 - Approach a purchase order financing company, who would pay the scrap yard for the required supply. This payment is usually done through a letter of credit.

• Step 3 - The required scrap material is delivered to the customer.

• Step 4 - The transaction is settled once the customer makes the payment.

• Step 5 - All profit apart from a small fraction which is kept by the financing company is given back to the scrap merchant / dealer.

Well you must have understood by now, that how easy it is to handle a huge order even if you do not have the optimum cash flow. Your company continues to grow and establish itself as a big name in scrap metal business. Not only this, nowhere on the balance sheets of the scrap dealers, does this money show as any debt. So do not hold yourself back on the opportunities to sell scrap - metal, plastic, rubber, paper, electronics, paper, etc. Build on your client base through purchase order financing.

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