With the U.S. economy showing signs of improvement, growth is expected to accelerate in the second half of the year, potentially leading to an increased need for purchase order financing.
As the economy gains steam, wholesalers could begin to see additional business. Should this come in the form of large orders, small-to medium-sized companies will likely need to rely on some sort of financial assistance to complete orders.
According to the Bureau of Economic Analysis, the economy grew less than expected in the first quarter, with gross domestic product (GDP) revised down to an annual rate of 1.8 percent from the previous estimate of 2.4 percent. This downward revision was more dramatic than economists surveyed by Bloomberg expected, as the median forecast of the 82 experts called for a 2.4 percent rise in GDP.
"We just got off to a slower start than expected," Maury Harris, chief economist for UBS Securities, told the news source.
However, growth is projected to pick up in the second half of the year.
"We do expect some modest improvement as we go through the year based on a view that the economy is going to continuously show some improving resilience," David Meline, CFO at 3M, told Bloomberg.
Should the economy begin to gain traction, wholesalers across the country might start to see larger orders than previously handled. As a result, these businesses may need to rely on some form a financial assistance.
One option is purchase order financing, which allows a small- to medium-sized business to obtain up to 100 percent of the funds needed to fill an order. A major benefit of this lending agreement is that it doesn't require business owners to sell equity in their company.