Is the tide turning? Personal incomes are up.

In my other blog, I wrote about the effects of the rise of the national GDP and the relation to the  factoring industry. Today, we get news that personal incomes and consumer spending also rose. Sure, both of these events are probably related, and as many economists state, this happened because of a whole bunch of "one time" events. For example, a large part of the personal income growth was due to a one time social security payment.

Ok. Sure. A whole bunch of "one time events" perhaps, but a good combination nonetheless. Although economists are not predicting robust growth this year, they are predicting growth. I am not saying that we should all jump up and uncork the Champagne but this is good and could potentially kick-start some areas of the economy.

How will all of this affect the purchase order funding industry? Positively, I expect. Purchase order financing is all about financing inventory that is in transit from the supplier to the end customer. Companies can only keep lean inventories up to a point - otherwise they start affecting revenues and profits. So, some will start purchasing goods.

The current situation may help those in our industry. Many companies will be unable to get a business loan just because credit is hard to come by these days and will need an alternative source of business financing. PO financing is one of such alternatives.

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