Although the economy has been slow to recover from the Great Recession, it has shown some signs of improvement in recent months, which might have led to an increase in consumer confidence toward the future of the economy.
Should economic growth begin to accelerate, wholesalers might begin to see larger orders than they have in the past. While this could provide them with a good opportunity for growth, small companies may not be able to fill these orders on their own, which is where purchase order financing can be helpful.
According to Fannie Mae's April National Housing Survey, 39 percent of respondents said the economy is on the right track, marking a 4 percentage point jump from the previous month. Meanwhile, the percentage of people who believe their personal financial situation will worsen in the next year dropped 5 percentage points.
One of the positive signs that could trigger economic growth was the gross domestic product increase in the first quarter. After a sluggish end to 2012, GDP jumped at an annual rate of 2.5 percent in the first three months of 2013.
With the economy poised for further recovery, wholesalers could see additional business in the near future. If this leads to them receiving an order larger than they are able to handle using their available capital and resources, it could be a good idea to utilize purchase order financing.
This type of lending agreement allows smaller businesses to receive 100 percent of the funds needed to fill an order, which can allow a wholesaler to take advantage of a game-changing order from a big box retailer, such as Target or Walmart.
In addition to allowing wholesalers to fill larger orders, purchase order financing also enables them to increase sales while preserving existing capital.