Purchase order financing market could receive boost from stronger economy

When the economy picks up steam, businesses across the country generally see more activity, including small- and medium-sized manufacturers and wholesalers. Oftentimes, this comes in the form of orders larger than usually handled, which can put companies in a financial bind. 

Manufacturers and wholesalers who are unable to fund orders on their own dime can turn to purchase order financing, which allows them to take advantage of opportunities for growth. 

It appears as though the U.S. economy could be headed in the right direction, with Americans' confidence on the rise. Gallup's U.S. Economic Confidence Index reached minus-15 in the week ending September 15, up six points in the past two weeks. 

Part of the reason the economy is seeing accelerated growth is the fact that manufacturing is rebounding. The Federal Reserve reported output at factories, mines and utilities increased 0.4 percent in August after no change in the previous month, according to Bloomberg

"Manufacturing should be a pretty decent contributor to growth over the second half of the year," Brett Ryan, U.S. economist at Deutsche Bank Securities, told Bloomberg. "You have an elevated level of unfilled orders, so that bodes well for production."

With favorable conditions for growth, small- and medium-sized manufacturers and wholesalers may begin to see orders larger than they have received in the past. However, smaller companies can struggle to fill such orders due to limited available resources. 

Fortunately, purchase order financing is available to make these opportunities for growth a reality. Should a manufacturer or wholesaler receive an order from a big-box retailer, such as Target or Walmart, this type of lending can be used to receive up to 100 percent of the funds needed to complete the order.