Bringing Working Capital To Your Business!

Is your business

experiencing growth?

SMPL has been connecting business owners
to flexible growth capital solutions for many years through our nationwide network of capital partners.

We can help!

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About Working Capital Solutions / Revolving Credit Lines

SMPL secures funding for companies in a broad base of industries. Our clients come to us to find a more flexible lending partner to meet their growth needs. Many are declined by the bank and are in need of a more creative and entrepreneurial funding solution

We consult on a wide range of funding options for business owners throughout the United States in the following areas:

Supply chain financing

Equipment loans and lease programs

Lines of credit

for working capital needs

Term loans

for marketing, hiring staff and general expansion needs

Factoring services

for accounts receivable financing that also provides for back-office credit and collection functions

Purchase order financing

Asset based loans

Business acquisition financing

Inventory financing

Private commercial real estate

Private commercial real estate

SBA loans

for business and real estate needs

Whether you are a startup or an established business in need of $100,000 or $10,000,000. We have the capital partners to meet your needs. Contact us to see how we can assist in taking your business to the next level. To your success!

Purchase order financing

Purchase order financing continues to be the #1 request we receive here at SMPL. It is the most valuable business loan product in the eyes of our clients because it directly impacts the growth of the client's business. Working Capital Solutions such as factoring and revolving lines of credit secured by accounts receivable and inventory speed cash flow and are also beneficial, but PO financing is the most exciting product for our clients. In virtually every case, our clients have worked hard to secure purchase orders from their customers. Depending on the size of the order, there can be tremendous pressure to perform and deliver. The order our clients have worked so hard to receive could be out of reach if they don't have the wherewithal to fulfill it. That’s tragic. Luckily, there is a solution!

How do you qualify for purchase order financing?

    Strong supplier relations:

  • It is easier when the borrower has a verifiable transaction history of successful delivery with the supplier. The greatest chance of approval is when the finance company is being asked to take the borrower's current production from "A to B" versus a first time order with a new supplier that has never been used before. There is "execution risk" inherent in this type of financing and the funding source needs to be comfortable with the supplier's capabilities.
  • Credit worthy customers:

  • It is essential that the customer presenting the purchase order has adequate credit strength relative to the size of the order being placed. For example, a small mom-and-pop shop placing an order for $1,000,000 of any product would have a harder time getting approved than Walmart or Target.
  • Ability to direct customer payments to the lender

  • Collection of the invoice to the customer needs to be routed through the lender's bank account. This is the primary source of repayment. Once the customer pays, the lender's credit line is paid down, followed by finance fees, with the balance forwarded to the client. This balance represents the client's profit in the transaction.

    Established borrowing entity:

  • We are occasionally approached with purchase order or supply chain financing requests (sometimes in the millions of dollars) from newly formed entities with no assets and limited, if any, transaction history. These are naturally challenging. The exception would be if this newly formed entity was owned by a solid team of owners with previous experience in the same industry as the newly formed endeavor. Even still, the owners in these scenarios would need to have a strong outside net worth and secondary source(s) of collateral to pledge should the transaction go south, and the lender need to be made whole.
  • Personal guarantees required:

  • When there is resistance to personal guarantees, there is resistance from the lender to approve the line of credit. When borrowers request the removal of a personal guarantee they are essentially saying, "we need money to fulfill orders, grow our company and profit from that growth, but we are not willing to promise to pay you back. If you lose your money, too bad." Well, they don't actually say it in these terms, but they might as well because that is what the lender is hearing. It is required that the borrower(s) stand behind the proposition they are asking the lender to finance.
  • Direct payment to the supplier:

  • Similarly, the lender requiring payment directly from the customer also needs to pay the supplier directly. Payments to intermediaries, brokers, or anyone aside from the actual supplier is prohibited. The lender needs to ensure that the supplier is paid for the goods they are producing. Payment to any other source leaves the lender at risk.

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