How to Finance Your Business By Factoring or Purchase-Order Financing

MC Man By MC Man, 31st Oct 2012 | Follow this author | RSS Feed | Short URL
Posted in Wikinut>Business>Accounting & Finance

In this page, we would like to introduce how to finance your business in China by either factoring or purchase-order financing.

Background Information

In China, financing a business has its unique set of challenges. Most business owners want to obtain financing from the banking industry. However, obtaining business loans is not so easy in China. Your business should have years of profitable operating experience in order to qualify. But what if your business is new (but fast-growing)? Or, what if you do not qualify for a business loan from your Chinese banker but still have a great business?

You still have two good options, and they are not available from your Chinese bank. They are available from a factoring company and are particularly useful if you have one of the following two problems:

Problem #1

Your customer just placed a large order. You need money to pay suppliers.

If you are a reseller, wholesaler or distributor, then you do have a unique set of financing challenges. You have customers that want to pay slowly and suppliers that need to be paid quickly, leaving you trapped in the middle. The solution for this challenge is purchase-order financing. Purchase-order financing can cover up to 100% of your supplier payments, enabling you to deliver the goods and close your sale. With purchase-order financing you can accept big sale orders with confidence, knowing that you will be able to deliver.

Problem #2

Your customers take up to 90 days to pay. You need payment faster!

Waiting up to 90 days (or sometimes more) to get paid can be very challenging for any business owner. This may even kill your business especially if you have regular expenses, such as suppliers, rent and salaries that must be paid. The solution to this challenge is to factor your slow paying invoices. Factoring (also known as invoice discounting) allows you accelerate customer payments, reducing the 90-day wait to only 2 days. It is very easy to obtain and the main requirement is that you do business with good governmental or large commercial customers.


We believe factoring or purchase-order financing can really be helpful for your business. These products should at least help you grow your company and take it to the next level. If you want more information about financing, please visit: our Chinese Financial Blog. For additional tips about doing business, you may come to: our money making blog written by our business development team.

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author avatar Retired
1st Jan 2013 (#)

Thank for share Very intereresting

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author avatar MC Man
2nd Jan 2013 (#)

Great to know you find this wikinut page interesting.

Happy New Year!

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