Banks move to squeeze purchase order lenders :: Mmegi Online

Purchase Order lenders have not had an easy year as they were squeezed by both constrained government spending and the steady advance of commercial banks into the financing of working capital needs of firms rise.

Industry insiders in the purchase order financing space have revealed to MonitorBusiness that they have experienced year on year decline in profits mainly driven by declining sales and intense competition from commercial banks that once upon a time didn’t care much about purchase order financing.

Commercial banks, backed by billions in deposit funding and broader client portfolios, are able to offer more competitive rates particularly to established Small and Medium Enterprises (SMEs) with government contracts putting pressure on independent lenders that traditionally filled gaps left by conservative bank products in the past.

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