Shaw Capital Management March Newsletter: Japanese Government Submits Budget for Next Fiscal Year

 Shaw Capital Management: Japanese Government Submits Budget for Next Fiscal Year

Japanese Government Submits Budget for Next Fiscal Year: Shaw Capital Management News

The Democratic Party of Japan (DPJ) government submitted to the Diet the fiscal 2010 budget amounting to ¥92.3 trillion, its first budget since its inauguration in mid-September. The budget was even larger than its counterpart for the current fiscal year — which was already a record if one includes the second supplementary stimulus package, approved last December. This was because of additional spending on child allowances, free senior high school education, cash subsidies to farmers, and higher payments to medical institutions to alleviate the shortage of medical doctors. Particularly noteworthy is the large amount devoted to social security, up to ¥27.3 trillion, which account for 51% of general public spending … the first time that the social security share has exceeded 50%. In marked contrast, public works investment, which has been cut back by almost 20%, amounts to ¥5.8 trillion, a record drop that symbolizes the DPJ’s philosophy of shifting money to people from public works... eightynine dam projects are likely to be frozen.

At a news conference, Prime Minister Yukio Hatoyama described it as “a budget meant to safeguard the life of the people.” He also claimed that three reforms were incorporated in the architecture of the budget: first, the principle of a shift of priority “from concrete to people”; second, initiatives taken by politicians instead of bureaucrats; and third, securing transparency in the budget formulation process. Some creditable aspects notwithstanding, the budget bill appears to be overshadowed, as media reports made clear, by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent as recently pointed out by credit rating agency Standard & Poor’s which raised the prospect of a downgrade in Japan’s sovereign debt rating. “The budget bill appears to be overshadowed by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent.” “Japan’s economic policy flexibility has diminished as a result of increased fiscal deficits and government debt, persistent deflation and a prospect of continued sluggish economic growth”, analysts at the firm said in a note.

“It’s impossible to keep tolerating this massive spending,” said Takeshi Minami , chief economist at Norinchukin Research Institute in Tokyo. “Japan’s fiscal health will continue to be exceedingly severe given revenue won’t grow and a stagnant recovery may require additional economic measures.” A major reason for the squeeze is a plunge in prospective tax revenues due to the economic downturn and the drop in corporate profits. Tax revenues for fiscal 2010 are estimated to fall to ¥37.4 trillion, the same level as 26 years ago, in the mid-1980s — while corporate tax revenues are expected to be half the amount in normal years. As a result, the government has to raise ¥44.3 billion in new government bonds, compared to ¥53.5 trillion in FY2009. This leaves the treasury dependent on debt for 48% of the total budget, up 10 percentage points.

 At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP. “At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.”

According to the new government, the economic policies adopted by the previous ruling party, the Liberal Democratic Party (LDP), failed on two fronts: initially boosting demand by increasing public investment, which was effective in the short term but not sustainable until the end of the 1990s. And later enhancing the supply side of the economy by deregulating the labour market and privatizing public entities, which simply widened the income gap within the economy, in the 2000s. However, the new budget was not well received by most observers. The announcement was rather sudden and lacked a comprehensive path to achieve the stated goals, they claim. Also, no reliable, specific incentives were offered, such as tax changes or deregulation that affect private sector behaviour. More importantly, given its enormous debt, the government has limited room to offer any incentives without jeopardizing other parts of the economy. However, there was no mention of these painful trade-offs. In addition, while the budget contains some signs of change, there is concern that it may not adequately stimulate the economy. Most private sector economists believe that spending measures in the fiscal 2010 budget (and in the second fiscal 2009 supplementary budget) are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April. “Most private sector economists believe that spending measures in the fiscal 2010 budget are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April.”

Overall, the budget appears to be the result of a compromise between an attempt to impose some fiscal discipline and the promises made in last year’s summer election of new direct supports to households, such as child allowance, as well as concern over a double-dip recession. “Harsh financial conditions have prevented the administration from keeping all the promises that the DPJ made during its campaign last summer (for instance it has eliminated highway tolls and the gasoline tax). But the administration has succeeded, to some extent, in realizing the party’s slogan of “shifting weight to people from concrete” and its aim of providing more funds for households, rather than for industry-linked organizations and large-scale public works projects”, asserted in its editorial the Japan Times, one of the main national newspapers. “Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats.”

The budget must now be approved by Japan’s parliament before takingeffect. Hatoyama’s popularity has dropped to 48% this month from 71% after he took the office in September. Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats. So in the end the budget and its goals may be more dream than reality.

Foreign Exchange Markets 2010: Shaw Capital Management

The main feature of the foreign exchange markets over the past month has

been the further sharp fall in the euro. There has been no real change in

the background economic situation in the euro-zone; but there has been

a serious deterioration in the financial background as doubts have increased

about the ability of Greece and some other periphery countries to cope

with their massive fiscal deficits and service their sovereign debts.

This is clearly leading to a withdrawal of international funds from the

European capital markets, and is dramatically illustrated in the widening

of yield spreads in the bond markets of member countries.

There is still a general assumption that the stronger members will provide

support for the weaker members if this proves to be necessary to prevent

a default on sovereign debts.

But the uncertainties have been increased by conflicting statements from

the European Central Bank and some politicians about the willingness to

undertake such operations, and so investors and speculators have taken

evasive action, and the euro has fallen by around 10% from its peak in early-

December.

This fall has provided support for the other major world currencies, including

the dollar; but the background situations in Japan, and in the UK, also

provide reasons for concern, and so the currency markets remain in a very

uncertain state.

It is likely that the uncertainty will continue. The US economy is clearly

recovering from recession; economic conditions in Japan are very weak,

and Japan appears to face the possibility of a credit downgrade if it does

not take steps to reduce its massive fiscal deficit; and there have already

been warnings from Standard and Poor’s that the UK also faces the possibility

of a credit downgrade if there are no convincing measures to reduce its

huge fiscal deficit after the forthcoming general election.

Prospects are therefore very difficult to assess; but our tentative conclusion

is that the dollar will continue to “improve”, helped to a considerable extent

by weaknesses elsewhere; and that this will allow market pressures to

gradually subside as the global economic recovery continues through the

year.

But the possibility of a major currency crisis cannot

be ignored, especially if the debt problems in Greece

and other periphery countries threaten to lead to the

break-up of the single currency system in Europe.

It is fortunate therefore that the available evidence

on the performance of the US economy is more

encouraging. Non-farm payrolls fell again in December

by 85,000, but are expected to have increased in

January; retail sales held up well in the pre-Christmas

period; manufacturing output is improving, according

to the latest report from the Institute of Supply

Management; and even the housing market appears

to be recovering.

This general situation is reflected in the first

preliminary estimate from the Commerce Department

of growth at a seasonally adjusted annualised rate of

5.7% in the final quarter of last year, a higher figure

than the market had been expecting.

Most economists therefore appear to be forecasting

overall growth this year in the 2.5% to 3% range, after

the estimated fall of 2.4% last year.

The Fed is clearly in no hurry to tighten its present

monetary stance. The statement after the latest

meeting of its Open Market Committee was more

upbeat about the prospects for the economy; but shortterm

interest rates were left unchanged and close to

zero, and there was a clear indication that they would

remain at very low levels “for an extended period”.

The bank did state that it will discontinue most of its

emergency lending programmes, and that it would

end its purchases of mortgage securities in March; but

there was no indication that it would be prepared to

implement an “exit strategy” until there was

convincing evidence of a sustainable economic

recovery. It is also unlikely that there will be any early

changes in fiscal policy.

The recent State of the Union message to Congress by

President Obama included a request for the approval

of a further fiscal stimulus package this year amounting

to around $100 billion to help to tackle the

unemployment problem, and he has also presented a

$3.8 trillion budget for fiscal 2011 that is likely to

maintain the overall deficit around the $1.35 trillion

level expected this year.

Much will depend on the attitude of overseas holders,

and especially on the attitude of the Chinese and

Japanese authorities.

For the present they seem to be prepared to maintain

and even increase their dollar exposure; and if this

continues, and the problems of other major currencies

remain unresolved, it should be enough to allow the

dollar to “improve”.

The euro struggled to recover in the early part of

January from the big fall that occurred in December;

but the recovery did not last very long, and it has

subsequently fallen sharply again, to leave it value

against the dollar around 10% below the level in early-

December.

There has been no significant change in the underlying

economic background, although there is some evidence

that the fragile recovery that was developing is losing

some momentum.

But there has been a serious deterioration in the

financial background as the fears have increased that

Greece and some other periphery countries in the

euro-zone may be unable to fund their massive fiscal

deficits, and service their sovereign debts.

There is also considerable uncertainty about the

intentions of the European Central Bank and the

stronger countries if conditions continue to worsen,

and so overseas holders have started to withdraw

funds from the European capital markets to await

developments.

The present lack of urgency at the central bank and

amongst the key politicians suggests that this trend

will continue, and that the euro will fall still further;

but there is still some hope that the seriousness of the

situation will finally produce a support operation that

will ease the situation.

All the available evidence continues to point to a slow,

two-speed recovery in the euro-zone economy.

Germany and France appear to be performing

reasonably well, although there are some signs of

slowdown in Germany; but Greece, Portugal, Spain,

Ireland, and even Italy are struggling to escape from

recession, and are expected to keep overall output in

the euro-zone this year around the 1% level.

There is also considerable uncertainty about the intentions

of the European Central Bank and the stronger countries

if conditions continue to worsen, and so overseas holders

have started to withdraw funds from the European capital

markets to await developments.

Retail sales remain depressed, and fell by 1.2% between October and

November to reflect the continuing caution of consumers; and industrial

orders in Germany rose by much less than expected in November, after a

very disappointing result in October, to indicate some weakness in export

prospects that had been expected to provide significant momentum to the

economy.

Prospects therefore remain disappointing, and are being made worse by

the differences that exist between member countries.

The European Central Bank therefore faces a difficult situation. It continues

to forecast “moderate” growth and “moderate” inflation; but it is being

severely criticised for failing to address the problems of a two-speed

economy, and for its unwillingness so far to face the threat that the

deteriorating situation in Greece could quickly begin to destabilise other

member countries and have serious consequences for the financial stability

and growth prospects of the entire area.

It is not surprising therefore that investors and speculators have started

to reduce their exposure to the euro.

The critical question therefore is whether the fall of the euro is now over.

Since the currency is unlikely to receive any real support from the general

background situation in the euro-zone, everything depends on the

developing debt situation, and particularly on the situation in Greece; and

also on the possibility of support operations from stronger member countries

and from the European Central Bank, and the European Commission.

The situation remains uncertain. The central bank appears to be reluctant

to offer help, and the German government, which might have been expected

to become involved, has also made no response so far.

But the European Commission has endorsed the latest plans by the Greek

government to introduce an across-the-board freeze on public sector wages

and cuts in allowances that are expected to reduce the overall public sector

wage bill by around 4%.

This may encourage support from elsewhere; however the Commission has

warned that it will not tolerate any slippage from the target and will if

necessary demand tougher action from the government to ensure that it

stays on course.

But it is far from clear that the Greek government can obtain the necessary

support in parliament even for the present proposed measures, and so the

uncertainty will continue.

It is therefore likely that there will be further falls in the euro over the

coming weeks.

Sterling has improved slightly over the past month, helped by the weakness

of the euro.

The background situation in the UK remains unattractive, and there have

already been threats that its AAA credit rating is at risk unless there are

credible measures to reduce the massive fiscal deficit after the forthcoming

general election is over.

The European Central Bank therefore faces a

difficult situation. It continues to forecast

“moderate” growth and “moderate” inflation;

but it is being severely criticised for failing

to address the problems of a two-speed

economy, and for its unwillingness so far to

face the threat that the deteriorating situation

in Greece could quickly begin to destabilise

other member countries and have serious

consequences for the financial stability and

growth prospects of the entire area.

But the UK is not constrained by membership of the European single

currency system, and so there is no immediate risk of a default on its

sovereign debts.

It has therefore been able to benefit from the problems affecting some

other European countries.

The latest figures from the Office of National Statistics indicate that the UK

just managed to move out of recession in the final quarter of last year. The

estimate of growth of only 0.1% in the quarter was a considerable

disappointment, and it is expected that it will be revised higher; but clearly

the economy is not performing very well.

Government spending remains strong, and there was a surge in retail sales

in the run-up to Christmas; but the anecdotal evidence suggests that

consumers became much more cautious again in January.

The latest meeting of the Monetary Policy Committee of the Bank of England

was concerned by the poor reaction so far to the dramatic measures that

have been introduced to counter the recession, and reacted to this situation

by leaving UK base rates unchanged once again at 0.5%.

It clearly has no intention of moving to an “exit strategy” until there is

convincing evidence that a sustainable recovery in the economy is underway.

It did announce that purchases of market securities under the quantitative

easing programme would now be discontinued after the £200 billion target

has been reached; but its main priority is to continue to provide support

for the fragile economic recovery.

Fiscal policy is also likely to remain unchanged until after the election,

because the necessary measures to reduce the huge deficit will be unpopular,

and might influence the outcome of that election.

Sterling is therefore receiving no real support from the domestic background

situation, and in other circumstances might have been expected to move

lower.

But the problems affecting the other major global currencies, and particularly

the problems affecting the euro, have at least delayed any further falls.

The yen has improved over the past month, despite a generally unfavourable

domestic background situation, and some attempts by the Japanese

authorities to prevent its appreciation against other currencies.

It has achieved an enhanced “safe haven” status in the current storm in

the currency markets, and on the back of the relative success of its exports.

But conditions in the Japanese economy remain very weak, and there has

even been the threat of a downgrade of its credit rating unless measures

are introduced to reduce its massive fiscal deficit.

However it does not appear that this threat will prevent the new Japanese

government from introducing further measures to stimulate the economy,

and urging the Bank of Japan to intervene in the markets to weaken the

yen, and so its prospects remain very uncertain.

Shaw Capital Management Newsletter: Japan Submits Budget for 2010

The Democratic Party of Japan (DPJ) government submitted to the Diet the fiscal 2010 budget amounting to ¥92.3 trillion, its first budget since its inauguration in mid-September. The budget was even larger than its counterpart for the current fiscal year — which was already a record if one includes the second supplementary stimulus package, approved last December. This was because of additional spending on child allowances, free senior high school education, cash subsidies to farmers, and higher payments to medical institutions to alleviate the shortage of medical doctors. Particularly noteworthy is the large amount devoted to social security, up to ¥27.3 trillion, which account for 51% of general public spending … the first time that the social security share has exceeded 50%. In marked contrast, public works investment, which has been cut back by almost 20%, amounts to ¥5.8 trillion, a record drop that symbolizes the DPJ’s philosophy of shifting money to people from public works... eightynine dam projects are likely to be frozen.

At a news conference, Prime Minister Yukio Hatoyama described it as “a budget meant to safeguard the life of the people.” He also claimed that three reforms were incorporated in the architecture of the budget: first, the principle of a shift of priority “from concrete to people”; second, initiatives taken by politicians instead of bureaucrats; and third, securing transparency in the budget formulation process. Some creditable aspects notwithstanding, the budget bill appears to be overshadowed, as media reports made clear, by concern over a severe revenue shortage and its implications for the future of Japan’s public finances, which are already debt-laden to a perilous extent as recently pointed out by credit rating agency Standard & Poor’s which raised the prospect of a downgrade in Japan’s sovereign debt rating.

“The budget bill appears to be overshadowed by concern over a severe revenue shortage and its implications for the future of Japan’spublic finances, which are already debt-laden to a perilous extent.”

“Japan’s economic policy flexibility has diminished as a result of increased fiscal deficits and government debt, persistent deflation and a prospect of continued sluggish economic growth”, analysts at the firm said in a note. “It’s impossible to keep tolerating this massive spending,” said Takeshi Minami , chief economist at Norinchukin Research Institute in Tokyo. “Japan’s fiscal health will continue to be exceedingly severe given revenue won’t grow and a stagnant recovery may require additional economic measures.” A major reason for the squeeze is a plunge in prospective tax revenues due to the economic downturn and the drop in corporate profits. Tax revenues for fiscal 2010 are estimated to fall to ¥37.4 trillion, the same level as 26 years ago, in the mid-1980s — while corporate tax revenues are expected to be half the amount in normal years. As a result, the government has to raise ¥44.3 billion in new government bonds, compared to ¥53.5 trillion in FY2009. This leaves the treasury dependent on debt for 48% of the total budget, up 10 percentage points. At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.

“At the end of the fiscal year, on March 31, 2011, the outstanding balance of government bond issues will have shot up to ¥637 trillion, the equivalent of 134% of Japan’s GDP while public debt will probably spiral to ¥973 trillion, almost double GDP.”

According to the new government, the economic policies adopted by the previous ruling party, the Liberal Democratic Party (LDP), failed on two fronts: initially boosting demand by increasing public investment, which was effective in the short term but not sustainable until the end of the 1990s. And later enhancing the supply side of the economy by deregulating the labour market and privatizing public entities, which simply widened the income gap within the economy, in the 2000s. However, the new budget was not well received by most observers. The announcement was rather sudden and lacked a comprehensive path to achieve the stated goals, they claim. Also, no reliable, specific incentives were offered, such as tax changes or deregulation that affect private sector behaviour.

More importantly, given its enormous debt, the government has limited room to offer any incentives without jeopardizing other parts of the economy. However, there was no mention of these painful trade-offs. In addition, while the budget contains some signs of change, there is concern that it may not adequately stimulate the economy. Most private sector economists believe that spending measures in the fiscal 2010 budget (and in the second fiscal 2009 supplementary budget) are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April. “Most private sector economists believe that spending measures in the fiscal 2010 budget are expected to provide a limited boost to Japan’s GDP and to kick in no sooner than April.”

Overall, the budget appears to be the result of a compromise between an attempt to impose some fiscal discipline and the promises made in last year’s summer election of new direct supports to households, such as child allowance, as well as concern over a double-dip recession. “Harsh financial conditions have prevented the administration from keeping all the promises that the DPJ made during its campaign last summer (for instance it has eliminated highway tolls and the gasoline tax). But the administration has succeeded, to some extent, in realizing the party’s slogan of “shifting weight to people from concrete” and its aim of providing more funds for households, rather than for industry-linked organizations and large-scale public works projects”, asserted in its editorial the Japan Times, one of the main national newspapers.

“Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats.”

The budget must now be approved by Japan’s parliament before taking effect. Hatoyama’s popularity has dropped to 48% this month from 71% after he took the office in September. Almost every move the government makes over the coming months must be seen against the backdrop of the crucial upper house election, which must be held in July for half of the seats. So in the end the budget and its goals may be more dream than reality.

Shaw Capital Management and Financing - Freight Bill Factoring to Fund Your Need

Using Freight Bill Factoring to Fund Your Transportation Company by Marco Terry.

Most transportation company owners have to constantly juggle responsibilities. They have to handle vehicle repairs, driver payments, insurance payments, office expenses and more importantly - collecting invoices. Collections can be source of problems for many transportation companies (or freight brokerages) since most clients pay their invoices in 30 to 60 days . Few can afford to wait that long.

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.

One way to handle slow payment is to try and negotiate a quick pay - basically asking your clients to pay quickly. Some will do it. Others won't, or at least will only offer it if you give them a discount. Although they are not always reliable, negotiating a quick pay can be beneficial in most cases.

Shaw Capital Management and Financing offer a complete line of factoring services, purchase order funding, asset based financing, accounts receivable management, and other related financial services.

If quick pays won't work, your best alternative is to secure business financing to ensure you always have funds on hand to cover business expenses. This can be difficult for most owners since institutions require that all applications have stellar credit, assets that can be held as collateral and many years of experience. This will rule out business loans as an alternative for most small and midsized trucking companies. However, this is not necessarily a big problem since a business loan is not always the solution to this problem.

For many, freight bill factoring will be the better alternative. Freight factoring, as it is commonly known, can provide the equivalent of a quick pay by using an intermediary. The intermediary, called a factoring company, advances you funds against your freight bill. The transaction is settled once your client pays the invoice in full.

One of the advantages of freight factoring is that it provides predictable cash flow, enabling you to comfortably handle your business expenses. It eliminates having to worry about when your clients will pay.

To qualify for freight factoring you need to work with credit worthy clients. Also, your company needs to be free of liens, judgments and other encumbrances. Because of this, freight bill factoring is an ideal solution for small and growing trucking companies and freight brokers.

Shaw Capital Management and Financing offer funding for a wide range of industries and flexible funding requirements that most businesses can easily qualify for.

Shaw Capital: Shaw Capital Factoring VS Bank Loan

Factoring is Different From a Bank Loan in Raising Cash By Eve Garcia. Companies can sell their invoices to raise cash rather than go down the bank loan route.

Shaw Capital Management and Financing provide same-day-funding. We can help you meet your cashflow needs immediately without entering into a long term factoring relationship. The money you get for the freight bills we purchase is payment in full. Shaw Capital helps you to avoid costly mistakes, online scam, fraud and other identity theft transactions before you knew it.

More organizations and companies are selling invoices to a third party as a means of raising funds.

The financial process known as factoring is where a business sells its accounts receivable - its invoices - to a third party for immediate payment but receives less in return than the value of those invoices.

This system is usually used by a company when its available cash balance is not sufficient to meet its existing commitments or other cash needs such as fresh orders or contracts. It allows the business to maintain a smaller ongoing cash balance, though by selling the invoices for a lower amount than they are actually for.

The invoice is sold to a third party called a factor, and this is where the approach is different from a bank loan when it comes to a business looking to raise funds.

Shaw Capital Management and Financing - Factors make money available even in circumstances where a bank may be less willing to do so.

This is primarily because they are more concerned with the creditworthiness of the debtor - the business or organisation that is required to pay the invoices for the goods or the services delivered by the invoice seller.

In contrast, banks tend to focus more on the creditworthiness of the borrower when looking to lend.

Factoring is seen as a calculated risk by many firms and one they enter into for a specific reason.

The down side is that they are offloading their invoices for less than their face value, but the return is that they are getting the money owed to them much more quickly than they would have done if they had simply pursued the buyer of their goods direct.

A number of companies operate specifically in the factoring and invoice discounting business and actively contact companies and organizations that they believe will benefit from such services.

These firms look to promote a number of benefits of the services they offer to the invoice seller. They suggest that the process is a way to get access to money quickly and safely and that it also avoids the difficulties and inconveniences that can be involved in collecting bad debt.

It is also promoted to potential customer firms as helping to facilitate and smooth out cash flow and as a way of borrowing money that is secured by their debt.

Once the factoring business takes on the invoice and the debt, it has the responsibility of collecting payment. It makes its profit by paying the invoice seller less cash than the face value of the invoice.

It is worth "shopping around" when looking to engage the services of a such a firm, since the market is competitive, with estimates suggesting that in the UK alone it is worth in the region of £200 billion a year, and fees vary.

There are a variety of reasons for this, with a significant fact being the risk associated with the invoices that are purchased.

Before taking on the invoice, the factor will conduct various levels of research. This will include looking into the track record of the debtor firm to assess whether it is creditworthy or has a history of bad payment. Once taken on, the factor will then seek payment from the debtor.

Factoring is used across a wide spectrum of business organisations and more recently the practice - which has a history stretching back to the 14th century in England - has been adopted by government bodies.

Today in the UK, factoring is used in some form by around 50,000 companies as a means of releasing finance.

Shaw Capital Financing on International Purchase Order Financing

For Canada, UK and beyond - On this challenging economy you are looking into new territories, markets and industry channels, some of those may be based outside the US. Unlike most purchase order financing companies, we work with businesses seeking growth in foreign markets such as Canada, Mexico, UK and Asia. Whether you are looking for PO financing in Canada, purchase order financing in Mexico or PO funding throughout the EU, our international PO financing program is designed to assist your business to grow and expand in the global marketplace.

Shaw Capital Management and Financing sharing information, tips and advice on factoring and accounts receivable financing and factoring to avoid scams and other fraudulent transactions. Information focus on the importance of choosing the right firm and understanding the intricacies of this financing alternative and what pitfalls to avoid.

What is purchase order financing

Every business faces the challenge of managing cash flow. One tool to make it easier is purchase order financing. It gives you access to working capital in a manner that is quick, convenient and affordable. Companies use purchase order funding to support an expansion, handle a large order or surge in business, and even occasionally for operating expenses. The tool is particularly well suited to newer companies that cannot get authorized for a traditional business loan. Manufacturers, distributors, importers and exporters are good examples. Lets say your suppliers want you to pay cash on delivery, but your customer won’t pay you until 60 days after they receive your finish product - a classic cash flow problem, which purchase order financing is designed to solve. Here are some other applications:

Inexperience in generating financing

Lack of working capital

Need to keep suppliers and customers separate

Desire to avoid credit risk (PO financing is not considered debt)

Immediate sales need calls for fast response

Profit opportunity

How does purchase order financing work

Purchase order financing involves issuing letters of credit to suppliers of finished or non-finished goods, based on specific, tangible goods that have been presold to a creditworthy end customer. It can help you deliver on time, increase market share, and grow without selling equity or incurring bank debt. You will need to supply financial information about your company, customer and supplier. We take care of the rest, usually offering approval and getting your short-term funding to you in as little as two weeks. You can use this cash flow management tool to meet future growth opportunities, too -once your account is set up, the process is faster still.

About PurchaseOrderFinancing.com

PurchaseOrderFinancing.com serves as the link between small businesses and the working capital they need to seize an atypically large business opportunity. This website is the newest addition to the structured finance firm founded by Dan Casey in 2002 which develops and implements creative financial strategies for commercial clients with working capital challenges. Dan Casey, Founder and CEO. A graduate of DePaul University in Finance, Dan has orchestrated an extraordinary career in starting and building businesses.