Strengthening employment situation could create greater purchase order financing demand

For many years after the financial crisis, the employment situation was a major drag on the economy, but that is beginning to change. 

With the jobs market picking up steam, economic growth could accelerate in the near future, which might lead to additional business and increased demand for purchase order financing at small- to medium sized manufacturers. 

The private sector added 188,000 jobs in June, up from 134,000 in the previous month, according to the ADP National Employment Report. The majority came from the service providing sector, with just 27,000 created in the goods producing sector. 

By company size, small businesses led the way at 84,000 new positions, followed by medium-sized businesses with 55,000 and large businesses at 49,000. 

June even proved to be a solid month for the manufacturing industry, which added 1,000 jobs after many months of declines. 

"The job market continues to gracefully navigate through the strongly blowing fiscal headwinds," said Mark Zandi, chief economist at Moody's Analytics. "Health Care Reform does not appear to be significantly hampering job growth, at least not so far. Job gains are broad based across industries and businesses of all sizes."

The jobs numbers in June were better than economists predicted, as CBS News reported an expectation of 165,000 new positions. 

Should the improving economy lead to new business for manufacturers in the form of larger orders, these companies might need to increasingly rely on purchase order financing. 

For any number of reasons, small-to medium-sized manufacturers often struggle to fill big orders. When in need of financial assistance, purchase order financing can be utilized, as it allows a business to obtain up to 100 percent of the funds needed to fill an order. 

As a result, these companies aren't forced to sell equity in order to take advantage of these potential game changing opportunities.