The U.S. economy grew at a faster rate in the fourth quarter of 2012 than previously expected, which could be a good sign for small businesses.
As the economy improves, small- to medium-sized wholesalers and manufacturers might find themselves with large order requests. If they encounter orders that are bigger than they usually handle, they might be tough to fill without help.
However, purchase order financing can provide them with 100 percent of the funds needed to complete the order, which allows them to take advantage of the good opportunity for growth. While not ideal, some businesses are forced to sell off part of their company to fill these orders, but this type of lending allows them to avoid such a situation.
Businesses might begin to see some of these opportunities in the near future, as gross domestic product rose at a 0.4 percent annual rate in the fourth quarter of last year, higher than the 0.1 percent estimate, according to the U.S. Commerce Department.
"Certainly we would like to see stronger growth, but we did have some one-time drags at the end of 2012," Gus Faucher, senior economist at PNC Financial Services Group told Bloomberg. "I would expect growth to pick up through 2013."
Faucher said three of the biggest driving forces behind economic growth have been consumer spending holding up to the increase in payroll taxes, the flourishing housing market and additional business investment.
Both the Dow Jones Industrial Average and the S&P 500 Index have recently either hit or neared all-time highs, which is also a good sign for the economy moving forward.
The inability to take advantage of opportunities, such as a large order from Wal-Mart, can be a hindrance for businesses, but with purchase order financing, companies are able to take advantage of the opportunities presented by the growing economy.