A letter of credit is a document
issued by a bank or financial institution, which authorizes the recipient
of the letter (the "customer" of the bank) to draw amounts of money
up to a specified total, consistent with any terms and conditions set forth in
the letter.
This method of financing involves purchasing your open invoices and quickly increasing your cash flow. We then send the invoice to your customer with normal payment terms. Factoring your accounts receivable will increase your working capital.
Purchase Order Financing is similar to factoring, instead of buying your account receivable or invoice, we buy your purchase orders. Your business receives the money from the purchase orders within 24 hours upon approval. This boost your working capital, purchase raw materials and cover daily expenses to fill your orders.