Why Housing is Important to the Purchase Order Financing Industry

The housing market seems to be creeping up - slowly. I think most people would say that this is good for the whole economy. It's also very good for the purchase order financing industry, albeit indirectly. A large percentage of po financing clients tend to be suppliers to the so called big box retailers. There is a correlation between PO financing growth and retail growth.

Although retail sales have been surprisingly strong this is probably not sustainable unless housing recovers. Most individuals have a large portion of their wealth (and/or debt!) tied to a house. People saddled with homes that have depreciated in value still need to pay for them. They are usually stuck with the home, unable to sell it. Of course, this is good for the note holder (a bank or the "giant pool of money"). Not for the individual consumer though that hold the over-valued house. Why? Because presumably they'd be paying less - a lot less sometimes - if they had bought the house later (or if they rented). They see the big payment to the note holder as "wasted money". This gets complex because the "wasted money" is the note holders' profit/gain.

The economic ramifications of housing values are very complex. Few people truly understand them all. Unfortunately, I must admit I am not one of them. But what I do understand, is that a customer that is saddled with debt and with little disposable income is less likely to buy stuff..... and that's not good for the po financing industry.

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Learn about factoring and invoice factoring. Additionally, here is some information about business financing in Kansas and invoice factoring in Kansas and Kansas factoring financing.