by Claudia Bruemmer

Our partner, 1st PMF Bancorp, provides resources for wholesalers and general merchandise vendors that can help finance their business in today’s economic climate. One way PMF can help suppliers is with invoice factoring, and another way is by providing lines of credit or trade financing. With many years of experience in the U.S. and Asia, PMF Bancorp has the kind of knowledge you can use to help manage your capital and increase your profits.

Many wholesalers are finding it to their advantage to use Accounts Receivables Financing rather than the more traditional funding that is difficult to come by these days. When your business needs to raise funds, you must determine where to find the capital. In today’s economy, many traditional financing options are not readily available. Banks are reluctant to lend and are getting more demanding with their requirements. Friends and family are struggling themselves. You can’t count on Angel investors, either.

That means wholesalers must innovate in how they find capital to grow and maintain operations. Many wholesalers need a resource that can provide the cash needed to fulfill new orders, pay their staff and suppliers, and cover payroll tax obligations to the federal government in a timely manner. That means they can’t take the time necessary for loan approval from a bank.

If wholesalers can avoid raising capital from traditional sources, they can keep more capital for themselves. One way to do this is to use PMF Bancorp for Accounts Receivable Financing and Invoice Factoring.

Big Banks Are Hoarding Cash

As reported in Fortune, U.S. big banks said they spent the first quarter of this year writing loans and renewing credit lines. In fact, Bank of America (BAC) said it provided consumers and businesses with $144 billion in credit in the Q1, Wells Fargo wrote $151 billion in loans and JPMorgan Chase claims to have loaned $450 billion. However, the deposits are surging and the loan balances are shrinking at the nation’s top four banks.

As you can see in the chart above, loan balances actually shrank in the first quarter compared to a year ago, and this same thing has happened at other big banks. All the banks deemed “too big to fail” are taking in new deposits at rapid rates and not loaning money out.

The average loans outstanding at these top four U.S. banks dropped 7 percent from a year earlier, which is a decline of $210 billion in loans. At the same time, deposits went up 5 percent.

As noted in Fortune, the top U.S. banks, which were bailed-out with tax-payer dollars, are not doing much to support the U.S. recovery. The banks insist there are good reasons for this. They say good customers aren’t asking for loans and won’t be until the recovery gains momentum. While there are pockets of loan growth at some banks, for the most part, loans to American businesses are shrinking.

If you’re a wholesaler, and you need funding, you can rely on PMF Bancorp with invoice factoring for a line of credit or trade financing. It could be the right option for your business and it can help you manage your capital and increase profits in difficult times.