One of the reasons companies survive in the business financing industry is because they are careful. Having to fill out an application and providing lots of information is just part of how things are done. It's not uncommon for prospects to groan when they get a request for additional information from their financing company.
Let's look at why purchase order financing companies ask for information. Simple, they want to know both you and your business better. Since they don't know you personally (at least - they usually don't), the only way the can know you is by asking for an application along with all the supporting documents. As you can imagine, most applications and situations are complex. When po financing companies encounter such complexities during an application, they request additional information, above and beyond what was originally requested.
Let me give you an example, let's say a company submits his purchase order financing application and financial statements to a factoring company. The business shows promise but had a major loss this year. The owner anticipates that a new string of PO's it's about to win will enable her to turn the company profitable.
This is a tricky situation - should they trust the owner's assessment and just finance the company? Would you invest your own money knowing this information?
Most cautious companies - and people - will request more information to clarify this. For example, they could request the previous years financial statements to determine if the company was profitable before. The can ask for a business plan or perhaps the management team's resumes. Hence - the request for more information.
This is just one example of what can cause a request for additional information. There are many situations that can cause a single - or multiple - requests for more information.
Learn more about purchase order financing at the factoring financing information center.
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