Fall in initial jobless claims could lead to heightened purchase order financing demand

The U.S. employment situation continued to see signs of improvement in the past few months, with initial jobless claims falling in late June, potentially signaling that the economy is on the mend. 

As growth accelerates, various industries are likely to see a pick up in business, including manufacturing. That being said, small- to medium-sized manufacturers might need to rely on purchase order financing to fund larger orders. 

First-time claims for unemployment benefits decreased by 9,000 applications in the week ending June 22 to 346,000, according to the U.S. Department of Labor. This brought the four-week moving average down to 345,750 from 348,500 in the previous seven-day period. 

While the economy isn't growing at an overwhelmingly fast pace, experts believe it is strong enough to aid further improvement in the jobs market. 

"Economic growth is not over the top, that's for sure," Chris Rupkey, chief financial economist at the Bank of Tokyo-Mitsubishi, told Reuters. "We expect, however, economic growth will be strong enough to bring unemployment down at an acceptable pace."

With fewer layoffs, it is clear that employers are feeling more confident in the strength of the economy, with improvement in the housing market and consumer confidence gains continuing. 

Should the economy grow at an accelerated pace in the second half of the year, small- to medium-sized manufacturers are likely to see a pick up in business. If this comes in the form of orders larger than they usually handle, financial assistance may be needed. 

Purchase order financing is one available option, which allows a company to obtain up to 100 percent of the funds needed to fill an order. One of the major benefits of this type of lending agreement is that it enables a company to take advantage of game-changing opportunities without having to sell any equity.