Suppliers Guarantee

To obtain open credit from your suppliers, sometimes you need to give them more than your promise to pay in 30 or 60 days. A Supplier's Guarantee is a product only a few lenders provide, but it can give your suppliers a sense of comfort that they will be paid even if your business runs short of working capital, and in turn you receive more working capital if your suppliers give you more time to pay. Available from Porter Capital.

Advantages: Low cost, medium monitoring after initial funding.

Disadvantages: Few, but if your company starts to unravel, it will be hard to keep the company together. Needs to analyzed carefully and used with caution.

Current Availability: Not many lenders will know what you're talking about. A bank will want you to deposit dollar-for-dollar to obtain a Letter of Credit.

Return to Working Capital Planning Guide

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This Guide includes information on business financing options and how to decide which is best for your business.