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Purchase Order financing may be a solution. It is short
term funding used to finance the purchase or manufacture of specific
goods that have been pre-sold by you to a creditworthy end customer.
The cash advanced under PO Funding is used to pay for the
upfront costs necessary to fulfill the order from a
credit worthy business customer. |
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How Does Purchase Order Funding Work? Purchase Order
Funding is simply the advancing of cash to a business that has
purchase orders from creditworthy business-to-business customers. PO
Funding is done on a case-by-case basis, with the funds
advanced paid directly to third-party suppliers. Once you produce,
ship, and send an invoice for the goods - the funder will have a
Factoring company buyout it's interest. The transaction then
continues as a normal A/R factoring program. |
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When best applied, purchase order funding should have served as
bridge financing, enabling your growing company to realize profits
and maintain growth while getting to the point where
traditional financing is available based on demonstrated
profitability and performance. |
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Purchase Order Funding can be used by
Manufacturers, Importers, Exporters, or Distributors for:
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Purchase Order Funding allows businesses to
accomplish the following:
- Secure payment to a 3rd party supplier for finished goods that
will be shipped directly to the end customer.
- To pay job-specific suppliers for raw materials
- To pay for packaging, shipping costs, duties and inspections
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Basic criteria for qualifying for Purchase
Order Funding:
- Your Customers must be other credit worthy Businesses
(Consumer PO's not accepted)
- You must demonstrate the ability to satisfy the PO in 30 days
or less
- Your Profit margins must be high enough to absorb the funding costs
- Size of the purchase order must be a minimum of $50,000
- Your Suppliers must be solid quality vendors that can
demonstrate the ability to fill your order in a timely manner.
- Have an existing factoring or financing relationship or must be agreeable to setup
a factoring facility
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Additional Information on Purchase Order Funding
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To see if you qualify for
Purchase Order Funding - Click Here |
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To download a
Financing Worksheet - Click Here
To request more information about Purchase
Order Funding - Click Here |
Has your company received a large order?