Purchase order financing is a type of funding in which the factoring company issues a cash advance for ordered goods that have not yet been delivered. The funds can be used to cover Manufacturing costs, delivery expenses, and more.
Purchase Order Financing?
With PO financing, businesses can getan advance of cash for merchandise that has been ordered but not yet received. This funding can be used to conceal the costs of manufacturing, delivery, and other associated expenses. An alternative to conventional financing, purchase order financing is available to wholesale and distribution businesses who need immediate capital.
Make Your Business Thrive by Accepting Large Orders with PO Financing
Don’t refuse new opportunities just because you’re tight on cash flow. If money problems are holding back Purchase order financing (also known as purchase order factoring) can help you get the funds you need to fill customer orders when cash flow is tight. By freeing up working capital, it will give your business the resources it needs to take on larger contracts and grow.
Is purchase order financing right for your business?
- Does your company need more funding to keep up with rapidly increasing sales?
- Do you find that your business has less money to work with during its busiest seasons?
- Do you have money set aside to invest in other parts of your business?
How does purchase order financing benefit businesses?
Your company provides purchase orders for customer-ordered items, and the factoring company will finance up to 100% of the value of these transactions. By transforming your purchase orders into cash receivables, Purchase Order Financing makes it easier for your business to function. this way, you can get the resources you need to complete customer orders without waiting for payment.
Does My Business Qualify for PO Financing?
We have experience helping various types of businesses finance their purchase orders, including government contracts, wholesale distributors, industrial companies, manufacturers, importers and exporters. There are a few guidelines to see if you’re eligible:
- The transactional minimum gross profit must be 20% or more.
- Having worked with similar clients and businesses
- A minimum purchase of $100,000 is required for the first transaction.
- Must provide either qualified purchase orders or letters of credit.
Don't wait to start accepting large orders.
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What are the benefits of using purchase order financing?
There are many benefits that come with purchase order financing, especially for customers who need to fill orders but don’t have the money upfront. Other advantages are:
- Being approved for funding is easy, even if you have been rejected in the past by a traditional lender.
- The credit history of the company buying your product is all that matters to the factoring company – not yours.
- While quick growth is fantastic for business, it can become difficult to keep up with the demand. PO financing will provide you with a consistent cash flow so that you’re able to manage new orders as they come in.
- PO Financing is not a loan, it simply gives you the payment that you would have received eventually from your invoice. By allowing your company to do this, they don’t have to wait for other clients to pay their bills and they can create goods that then proceed with working capital.
Purchase order financing can help take your business to the next level.
We have extensive experience helping various industries finance their purchase orders, including but not limited to: government contracts, wholesale distributors, industrial and manufacturing companies, importers and exporters, drop ship orders, and direct ship orders.
Purchase order financing through Factoring.io can help your business in a multitude of ways. We have previously helped finance the following: