With the employment situation showing continued signs of strength, accelerated economic growth could be on the horizon.
As the economy grows, business at small- and medium-sized manufacturers and wholesalers could pick up, which may lead to an increased need for purchase order financing.
The U.S. economy added 195,000 jobs in June, but the unemployment rate was unchanged at 7.6 percent, according to the U.S. Department of Labor. Employment increased in leisure and hospitality, professional and business services, retail trade, health care and financial activities.
June's job gains were greater than expected, as economists surveyed by Bloomberg projected 165,000 additional positions.
"Job growth is starting to hum along," Jonathan Basile, director of U.S. economics at Credit Suisse Holdings USA, told Bloomberg. "All of it is laying the groundwork for more spending and more jobs. This virtuous cycle is really taking hold for the second half of the year."
Neil Dutta, head of U.S. economics at Renaissance Macro Research, told the source that wages are growing as well, which should help benefit economic growth.
"The improvement in employment and the improvement in wages suggest aggregate incomes are rising quite nicely," he said. "This sets the stage for a stronger second-half outlook for consumption."
Consumers confident in the direction. of the economy
Americans are beginning to feel more confident in the economy and their personal financial situations.
After dipping slightly in early June, consumer sentiment rebounded to remain at a high level by the end of the month. Rising household wages were the biggest driver behind high confidence levels, but job gains and wages also played a role.
The Thomson Reuters/University of Michigan Index of Consumer Sentiment was at 84.1, down slightly from the previous month, but much higher than a year ago at this time.
"Consumers now believe the recovery has achieved an upward momentum that will not easily be reversed," said Surveys of Consumers chief economist Richard Curtin.
Americans are also feeling better about their future prospects, with the Index of Consumer Expectations rising to a mark of 77.8, a 2.6 percent monthly bump and 14.7 percent year-over-year increase.
Purchase order financing demand could rise as the economy grows
With the economy poised for growth, small- and medium-sized manufacturers and wholesalers could begin to see additional business.
Should this come in the form of orders larger than they are used to handling, some sort of financing will likely need to be utilized.
When turning to a bank, smaller businesses are typically turned away, as they often have limited available capital or lagging cash flow. But that doesn't mean financial assistance isn't available.
Manufacturers and wholesalers that are told "No" by a bank can turn to purchase order financing. This lending agreement allows a business to obtain up to 100 percent of the funds needed to fill an order.
By using purchase order financing, small- and medium-sized manufacturers and wholesalers are able to avoid having to sell any equity, which allows owners of these companies to retain 100 percent ownership.