Thursday, December 13, 2007

Purchase Order Finance - Your Tool For Unlimited Sales

Do you sell to the government or to large companies? Do you regularly get purchase orders that stretch your company's ability to deliver? Lastly, if you had financing to cover all your supplier costs, could you sell more? Much more?
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If you answered yes to any of these questions, then purchase order financing could help your business grow.

Purchase order financing is a way of financing sales that has been gaining popularity with US and Canadian businesses. It offers a very simple proposition. If you have an order from a large credit worthy business (or government agency), then the financing company will provide you with the necessary funding to fulfill your supplier payments and make the sale. Call it sales based financing. It works well for resellers, distributors and wholesalers, although it can also be used in other industries.
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Here is how purchase order financing works. Let's say that you own a company that has been getting progressively larger orders, tightening your cash flow. After setting up a purchase order financing agreement, this is how your sales financing would work:
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1. You get an order from a client 2. The purchase order finance company handles up to 100% of your supplier payments (by direct payment or letter of credit) 3. The order is fulfilled and the goods are delivered 4. The transaction is settled, once the client pays their invoices
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As you can see, purchase order financing allows you to leverage the resources of the financing company and allows you to increase your sales. With PO financing, lack of cash flow will never be a reason to lose a sale.
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As opposed to a business loan from a bank, purchase order financing is very easy to obtain and can be set up in days. The main requirement is to have valid orders from good commercial or government clients. Most banks won't offer this type of financing, but you can get it from a factoring company. As a matter of fact, purchase order financing and invoice factoring are frequently combined to help reduce the costs of the transaction.
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So, if your purchase orders are piling up, be sure to consider financing with purchase order funding.

About Commercial Capital LLC Interested in purchase order financing? We are purchase order finance experts can provide you with a purchase order financing proposal. For more information, call Marco Terry at (866) 730 1922 (toll free USA / Canada).

U.S. Jobs in IT Development & Finance Solely Reserved for India

General Motors Corp. announced in late November 2005 that it will close 9 of its United States auto manufacturing plants as well as three assembly-related plants which includes one location in Canada. Ford Motor Co. followed suit in early December 2005 announcing it is considering the shutdown of up to 8 of its U.S. manufacturing plants, including engine and assembly operations, with one in Mexico. Americans are well familiar with the downsizing, outsourcing and offshoring of the U.S. manufacturing base which has seen 2/3 of its jobs lost in the past 20 years, having been traded in for third world cheap labor. And while white-collar workers have hardly been immune from offshoring practices infiltrating boardrooms, indication this week is that the tide has changed.
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Both the Intel Corp., the world's largest computer chip manufacturer, as well as J.P. Morgan Chase & Co., one of the world's largest financial institutions and 2nd largest in the U.S., are investing in creating new jobs in India over the next few years rather than in the U.S. Different in prior offshoring scenarios, however, is that back-office jobs such as investment banking, software engineering and research and development, previously occupied by American workers, will now originate from India as well.
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J.P. Morgan plans to locate 1/3 of its investment banking and support staff in Bangalore, India by the end of 2007. It will double the amount of its employees by hiring 4,500 graduates over the next two years. 3,000 of the new hires will work in investment banking with 1,500 providing support in its retail and commercial banking operations. There are presently 4,500 employees in front-office staff positions in Mumbai, India.
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With only 200 on staff in India just two years ago, in order to achieve their latest goal, J.P. Morgan will hire between 300-400 graduates a month in order to have 9,000 total positions in front and back-office positions by 2008, which includes complex derivatives settlements and structured finance transactions. The remaining approximately 4,000 - 4,500 employees J.P. Morgan employs will be divided between Bournemouth, England and New York, NY, although the ratio between both countries was not disclosed.
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Similarly, Intel will invest $1.1 billion in India over the next 5 years, with $800 million dedicated specifically for research and development operations and other projects including chip design, also in Bangalore, according to Chairman Craig Barrett. Although Intel will also explore expanding its manufacturing prospects in India, its present investment will largely be for more complex high-value work as opposed to just technical support and call-center jobs, which most IT firms offshore today.
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Other firms following this latest trend are Cisco Systems, the world's largest maker of internet equipment, which announced in October 2005 that it would invest $1.1 billion in India, tripling its work force to more than 4,000 from 1,400 in the next three years. It too will have research and development located in Bangalore. And it is likely that more of the banking industry will soon follow J.P. Morgan's lead such as Goldman Sachs & Co. which may double its staff to 1,500 in Bangalore.
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Microsoft Chairman Bill Gates is expected to invest $400 million in Hyderabad, India where he plans to hire several hundred workers. Gates has been outspoken, with his statement in April 2005, citing that there were not enough U.S. college students majoring in computer science, and thus wants to expand the H1B Visa program, allowing more foreign workers to come to the U.S. But critics believe that Gates and other industry executives are not being honest in their assessments, to wit, the banking industry's India strategy which is hiring finance graduates and not computer science graduates in expanse of their industry.
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In fact, consultants such as Stefan Spohr of AT Kearney estimate that investment banks could raise their staff levels in India to as much as 20% in the next few years. Since salaries in India are 70-80% lower than in the U.S., with total costs about 40% lower than in the U.S., the trend of offshoring will no longer exist. Rather, jobs will now originate from India and totally bypass the U.S.

Disputing the fact that there are not enough quality candidates, for example, in the computing engineering field, is the change in the way in which U.S. engineers are hired. Candidates are not only competing with their peers but also with the fear that they will be replaced by either imported foreign workers or offshore workers, even after they are hired.

Companies are directly contributing to the supposed engineering shortage themselves by requiring that an applicant meet every item on a detailed list of qualifications. Transfer of like-skills is a long lost concept. With approximately 200 responses for every job listing, companies have the luxury to hold out until they get the perfect candidate, as job cuts in technology positions are up 20% in the past year, according to Challenger, Challenger, Gray & Christmas. The unemployment rate for computer programmers and engineers is higher than the national average which does not reflect those who remain unemployed in Silicon Valley as they no longer register for unemployment benefits, nor those who were forced to move on to other careers.

According to Veronique Weill, head of operations at J.P. Morgan's investment banking division, "The quality of the people we hire is extraordinary and their level of loyalty to the company unbeatable," when referring to the hiring of employees in India. Funny, but that's what used to be said about American workers. Perhaps the American worker's biggest error was requiring a decent wage for quality work done. And others would argue that maybe it was their expecting U.S. companies would prefer them over foreign labor. Tragically, greed, under the guise of a global economy was the error, committed not by U.S. workers but by U.S. CEO's, and condoned by the U.S. government.

Copyright (c) 2005 Diane M. Grassi

Diane M. Grassi is a freelance columnist, reporting and writing commentary on current events of the day providing honest and often politically incorrect assessments.

From U.S. public policy to Major League Baseball, she is an eclectic thinker, and demanding of her readers to reflect on their own thinking patterns from an alternative perspective. Whether you agree with her or not, Diane M. Grassi will have you coming back to note her opinions, and if at best she wakes you up, then her goal will have been accomplished.

Ms. Grassi is featured with the online publications: The New Media Journal; American Chronicle; the Federal Observer; Opinions Editorials; the Conservative Voice; the Las Vegas Penny Press; Mich News; the Sierra Times as well as several others. She also writes regular columns on Major League Baseball where she is a featured online columnist with The Diamond Angle Baseball Ezine and Sports-Central.org. She can be reached at dgrassi@cox.net.