Financing a Commercial Printer Through Factoring

A company began business in 2009 as a graphics printing company.  The owner had encountered several attempts to bring forth business in other industries, but the commercial printing endeavor proved to be the most profitable.  With business growing so quickly, the owner soon maxed out his current line of credit with his local bank and was in need of additional financing.

Purchase order financing is exactly the financing solution the printing company needed to quickly raise capital in order to pay for the supplies necessary to fulfill a large order. For example, let’s say the printing company received a $1 million printing order but does not have the money to purchase enough ink to print out all of the agreed upon documents on their printers. Under normal circumstances, they might approach a bank and apply for a loan but these days, most banks aren’t even willing to extend or establish new credit lines.

Purchase order financing allowed them the opportunity to expand their business without utilizing their cash stores. Companies that do not have a lot of capital on-hand to buy materials needing to complete a job may routinely have to turn work down. This does nothing to improve their financial standing but instead, is quite hurtful. However, unless they can find a way to raise money so that they can afford to bankroll new jobs, there really is no alternative. They would have to pass on new jobs. This is unless of course, they use purchase order financing.

The factoring company worked with local and national banks cross cultivating business partnerships in an attempt to get companies the funds they need.  When the banks client needed additional capital for growth, and was unwilling to extend their own facility, the bank called a factor to inquire about their factoring services.  An inter creditor agreement was negotiated with the bank and the printing company began the factoring of their invoices within a few days.  The local bank was pleased because their client continued to grow without the need to offer them a larger line.  The factoring company helps another client, and the prospect receives the funds it needs for growth.

Factors are always grateful for the opportunity to work with banks.  Whether the client has exhausted its line with the bank, or whether it’s a buyout situation for the bank, a factoring company can help.  They understand that small, yet growing businesses need stability and an opportunity to stay successful in this economy.  Factoring can give printing companies that opportunity.