With the economy beginning to show signs of improvement in many areas, Americans are feeling better about the future.
Should the economy continue to stay on the right track, manufacturers across the country could begin to see additional business. While this would be a welcome sign to businesses of all sizes, those of the small variety might struggle to handle larger orders on their own. When a small- to medium-sized manufacturer receives an order bigger than it usually handles, purchase order financing should be explored.
U.S. adults were slightly more optimistic about the future of the economy in May, as 32 percent said the economy will improve, according to The Harris Poll. In April, 29 percent of respondents said the economy would improve.
Americans also felt better about their household financial conditions, with 26 percent believing their conditions would improve, compared to just one-in-five in the previous month.
As optimism continues to heighten, economic growth could accelerate. The National Association for Business Economics estimated the U.S. economy will grow 2.4 percent this year and 3 percent next year, fueled by rising home prices and the improving employment situation.
With increased economic growth expected in the future, small- to medium-sized manufacturers might want to prepare for additional business. Large orders from big-box retailers such as Target or Walmart can be game changers, but if they aren't financially prepared to handle an order of that magnitude, these companies might be forced to sell equity.
However, purchase order financing can prevent this outcome, as it allows a manufacturer to receive up to 100 percent of the funds needed to fill an order, allowing businesses to take advantage of opportunities for growth even though they have limited available capital and resources.