Is Purchase Order Financing Right For Your Business?

In News by Keith Dillihunt

Purchase Order Financing is ideal for your business if you are facing these business conditions:

  • Has your company grown faster and beyond your available working capital?
  • Do you have seasonal peaks that create large demand increases for your product?
  • Do you have an excellent opportunity to pick up a very lucrative contract but the bank won’t finance the inventory?

If the answer is YES!!! Then Purchase Order Financing is perfect for you!

What Is Purchase Order Financing?

Purchase Order Financing (PO Financing) is an alternative funding option for businesses that need cash to fill single or multiple customer orders.  Ideally, this works for resellers or distributors of products that currently don’t have the funds to pay their manufacturers.

The Purchase Order signifies a firm commitment to buy goods from the resellers or distributors and purchase order financing will pay the manufacturer to produce and ship the goods.

Once payment is collected from the buyers, who signed the purchase orders, the purchase order financing company will be repaid plus fees and then remit the remaining profit to you.

OK…How Does This Really Work?

  1. You get a purchase order from your customer
  2. You have already selected your manufacturer and purchase price
  3. We verify your customer’s credit, and supplier information
  4. We provide the fee structure for the financing
  5. You create the purchase order and send to us
  6. We create the purchase order to your supplier
  7. Your supplier manufactures and ships its goods
  8. Finished goods are delivered to your customer, who remits payment to us.
  9. We send your profits to YOU

Why Should I Use Purchase Order Financing?

Quite simply, you don’t have enough cash to fund this contract and your business simultaneously.   The bank won’t lend you the money and you’d rather not go ask your family.

PO Financing frees up your cash and expands your purchase capabilities, allowing you to go after ever LARGER orders.  All you need is a PO from a credit worthy customer to get started.

What are the fees for PO Financing?

Fees range from 2-7% on average based upon your customer’s credit worthiness.

How long does it take to get approved?

Typically, we can underwrite this deal within 2-5 days.

Can I use PO financing for international transactions?

Absolutely!  We specialize in financing transactions sourced from outside the United States.