Manufacturers may need purchase order financing with a faster growing economy

While the first half of the year proved under whelming for the U.S. economy, the final six months are expected to be better. 

Should economic growth accelerate, small- and medium-sized manufacturers might need to increasingly rely on purchase order financing, with a greater chance of receiving large orders. 

Private companies are more confident in the future of the economy, with the 12-month outlook increasing for the third consecutive quarter, according to PwC US's Private Company Trendsetter Barometer.

Nearly 60 percent of respondents were optimistic about the next year, up nine points from the previous quarter and 17 points from the fourth quarter of 2012. Meanwhile, 67 percent of private company executives said the economy was growing, and project 2.2 percent growth in 2013. 

"The steady climb of private companies' optimism is a positive break from the fluctuations in confidence we're used to seeing," said Ken Esch, a partner with PwC's Private Company Services practice. "As momentum builds around optimism in the US economy, we're finding that this translates into more companies looking to reinvest in their growth plans."

Stock market providing a boost to the economy
Another sign the economy is headed in the right direction is the surging stock market. According to CNBC, the Dow Jones Industrial Average hit a new all-time high on July 19, when it rallied 78.02 points to finish at 15,548.54. The previous record was set a few months prior on May 22. 

The S&P 500 also broke its previous record, when it gained 8.46 points to close at 1,689.37 on the same day. Howard Silverblatt, senior index analyst at S&P Dow Jones Indices told the news source the S&P 500 breached $15 trillion in market value for the first time ever. 

Better economy could increase the need for purchase order financing
With all signs pointing to accelerated economic growth in the final six months of the year, small- to medium-sized manufacturers might want to prepare for large orders. 

When big orders come in, these businesses often have to rely on some sort financial assistance to fill them, which is where purchase order financing comes in handy. This type of lending agreement allows manufacturers to obtain up to 100 percent of the funds needed to fill an order. Additionally, owners of these companies are able to retain full equity.