The business of scrap metal is a very profitable one. However in order to get success in this field, you must have the potential to handle large orders- persistently and consistently. If you want to be a successful scrap metal supplier, you must always be able to pay for scrap metal in advance and then wait for 2 to 3 months. There are many scrap metal suppliers who have the potential to handle much large order at a same time, while waiting 3 months to get paid. The problem lied herein.
Many suppliers approach banks and other financial institutions to get business financing. However, the fact is most of the banks don’t understand the business of recycled scrap metal well and usually never have a good solutions for this industry. As said, banks loans are not a good solution for scrap metal suppliers.
In this business, you must seal a deal quickly whenever you find best scrap metal prices. Instead of bank financing using purchase order funding is a better option for scrap metal suppliers. PO funding provides you the needed funds to carry out your confirmed PO, s. It enables you to pay for the order and close the sale. PO financing is an easy to use and works like this:
1. Scrap metal supplier/dealer secures a PO from the customer
2. The finance company then pays the scrap metal costs by placing a deposit or using a letter of credit
3. The order is delivered to the trader as per the deal.
4. Once you sell this order to your customer, the transaction gets settled
As a scrap metal supplier/trader purchase order Financing is a better option for you than the conventional bank financing. The reason for it is the ease with which it can be obtained. Purchase order from a worthy customer is all you need to avail this type of funding.