Although the economy has been showing a few signs of slowing down, the outlook for the next year is positive, potentially boosting purchase order financing demand.
As economic growth accelerates, small- and medium-sized manufacturers and wholesalers could begin to see additional business in the form of larger orders. Should this be the case, some sort of financial assistance will likely be needed, which is where purchase order financing could prove beneficial.
Nearly 75 percent of economists surveyed by the National Association for Business Economics forecast growth of 2.1 percent of more for the economy in the next 12 months, up from two-thirds in the first quarter survey, Boston.com reported.
As a result, hiring is expected to pick up, with around one-third of economists saying their companies added jobs in the second quarter – the highest percentage in nearly two years. Meanwhile, 39 percent said their firms would hire more in the next six months, which is almost a two-year high.
Small business owners push through the economic recovery
With the economy slowly pulling itself out of the hole created during the financial crisis, small business owners are putting in more work to ensure their companies are successful.
According to the latest Sage Reinvention of Small Business Study, 37 percent of small business owners are working 11 more hours per week, and 43 percent said they are taking less vacation. This type of dedication can be the difference between a small business growing in this economy and being forced to close the doors for good.
"The latest reinvention survey reveals the true reality that many small business owners are facing: that they continue to show resilience in the face of an anemic recovery, all the while increasing their management acumen to ensure their businesses are successful," said Connie Certusi, executive vice president and general manager at Sage Small Business Solutions.
Improving economy, and growing small businesses could push purchase order financing demand
Should small- to medium-sized manufacturers and wholesalers begin to see growth in the next year, larger orders could be in the future.
When a company of this size receives an order bigger than they usually handle, some sort of financial assistance is generally needed. If turned away by a bank, purchase order financing could be beneficial, as it allows businesses to obtain up to 100 percent of the funds needed to fill an order.