![]() When funding a purchase order, payments are made directly to suppliers by the factoring company. Purchase order funding can be one transaction or continuous, depending on the need. That’s where PO financing works to help you access funds. ![]() Many companies that seek financing from a traditional financial institution might not get approved, or the application process takes too long to solve the cash flow issue. This creates a working capital issue that becomes a “catch 22.” Without the money, you risk losing the order and customer permanently. The supplier of your company needs upfront payment for the supplies that are needed to start that customer’s purchase order, but the customer invoice won’t be paid for 60-90 days after shipment is received, and you do not have the liquid cash needed to cover the cost of supplies. When you need a flexible option to offer your finished goods to the customer, we can help fund purchase orders.Ĭonsider this scenario: Your small business receives a large purchase order from a new or existing customer. Many clients receive PO funding on their first transaction as a new company. Whether you’re a startup or an established small business, this product is available to small business owners who rely on purchase orders. The purchase order funder will subtract their fees and send the balance of the invoice to your company so that you receive payment. When the supplier is ready to ship the order, the purchase order financing company collects payment directly from the customer. PO loans will finance an entire order of goods or a portion, depending on the purchase order funder. This funding solution protects cash reserves from declining because of cash flow problems related to work orders. If order volume drops, there’s no long-term commitment, so they can stop using it at any time. PO financing allows companies to accept orders on goods and adjust the loan basis up or down quickly to meet working capital needs. ![]() Purchase order (PO) financing is a short-term funding solution that provides capital to pay supplier costs upfront for verified purchase orders.
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