Wholesalers might need purchase order financing with employment situation strengthening

The employment situation has continued to show signs of improvement, potentially signaling accelerated economic growth. 

As the economy picks up momentum, wholesalers could begin to see additional business. Should this come in the form of larger orders, these businesses might need to rely on purchase order financing

Initial jobless claims increased by 18,000 applications in the week ending June 15 to 354,000, according to the U.S. Department of Labor, but they are still at a level that shows labor market growth. To spur further growth, employers will need to limit the number of firings.

At the beginning of the year, many experts said tax increases and federal budget cuts could lead to an increase in jobless claims, but that hasn't been the case as first-time applications for unemployment benefits have been trending down in 2013 – a good sign for the overall economy. 

"Firms have just been very cautious in their hiring and remain so," Stephen Stanley, chief economist at Pierpoint Securities, told Bloomberg. "Still, by and large, the conditions in the labor market are pretty steady."

When economic growth accelerates, small-to medium-sized wholesalers might begin to see bigger orders. To be able to take advantage of these potential orders from big-box retailers, such as Target or Wal-Mart, wholesalers may need financial assistance. 

Due to limited available capital and poor cash flow, smaller businesses can struggle to obtain a loan from a bank, which is where purchase order financing comes in handy. 

This type of lending agreement allows a company to obtain up to 100 percent of the funds needed to fill an order. In addition to allowing wholesalers to take advantage of game-changing orders, purchase order financing also allows them to avoid having to sell equity in their business.