The employment situation continued to receive positive news, as applications for unemployment benefits dropped in the first week of June – a potential sign that the economy is headed in the right direction.
As economic growth accelerates, U.S. manufacturers and wholesalers could have a greater need for purchase order financing.
The week ending June 1 saw jobless claims fall by 11,000 applications to 346,000, according to the U.S. Labor Department. This was slightly higher than the median forecast from economists surveyed by Bloomberg, who called for a drop to 345,000.
"It underscores the improving trend we've seen," Millan Mulraine, director of U.S. rates research at TD Securities USA, told Bloomberg. "We do think there's some modest hiring taking place. It's still, at worst, OK."
Some fear federal budget cuts may hold back the employment situation in the coming months, but fewer layoffs could help businesses hire more employees should sales pick up in the second half of the year, the source noted.
If economic growth does, in fact, speed up, companies across the country could see additional business. This might lead small- to medium-sized manufacturers and wholesalers to see larger orders than they usually handle.
Orders from big-box retailers, such as Target and Walmart, can be game-changers for smaller businesses, but they often don't have the available capital or resources to fill these orders.
However, purchase order financing could enable these companies to take advantage of these opportunities, as it allows them to receive up to 100 percent of the funds needed to fill a large order.
Additionally, this type of finance agreement can help manufacturers and wholesalers avoid having to sell equity in their company.