Purchase order financing has helped many companies stay in business. By selling unpaid invoices, businesses receive a substantial percentage of the invoice, which is enough to finance most activities in the company. Despite the benefits of the purchase cash advance, some business owners are skeptical because of the myths surrounding this financing option. The myths can keep you from seeking financial help when the need arises. Here are the myths about purchase order financing to ignore.

The Loans are Distasteful

Most business owners believe that purchase order loans are distasteful, and only a few people can afford them. They think that only people who engage in shady dealings use this financing option. However, this is not true because people of all reputations and skills can use these loans to keep their businesses running. Even renowned companies use this type of financing when they have cash flow gaps.

The Loans Are Risky

Most people who are unfamiliar with purchase cash advance think that they have to put all their assets in line when receiving the loan. They believe that purchase order lenders require collateral such as real estate, payroll, bank accounts, and operational expenses. This not true because the lender will use the unpaid invoice as the collateral.

Once you receive the loan from the lender, you sell your invoices. This means that the lender will be in charge of collecting payments from your clients. Once the invoice is fully paid, your loan will be settled. It’s that simple, and you don’t need to risk your business assets as required when taking bank loans.

They Have High Rates

It is true that purchase order loans have higher interest rates than traditional loans, but not that high as most people think. The interests are comparable to those offered by banks. The interest rates are slightly high, but they are affordable. This myth has kept most business owners from receiving financial help that would boost their business.

The Process Is Lengthy

Some business owners believe that it would take longer to receive a purchase order loan. However, it takes only a few days to receive purchase cash advance as opposed to bank loans, which may take months to be approved. If you need quick cash in your company, purchase order financing is the way to go.

Most companies have benefited from purchase order financing. If you need a cash advance, you should ignore these myths and consider purchase order financing to boost your business.