What is Purchase Order Financing?

Purchase Order Financing (aka PO Financing) is NOT a loan but is a funding option for businesses that need cash to complete single or multiple customer orders. Unlike factoring, which provides an advance of cash from your invoices, purchase order financing gives you the ability to have goods available for your clients from your sources BEFORE generating an invoice.

What are the Features & Examples of How PO Financing can Help?

 
With many companies, cash flow problems exist. There will be times where there is not enough money available to cover the costs of doing business such as purchasing the supplies necessary to fill your order(s). Having to turn an order down would mean a loss of revenue and possibly risk tarnishing your reputation.

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• Gives you the ability to take on bigger orders

• Great for fast-growing companies

• You may qualify even with subpar credit because the weight is transactional driven

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Types of PO Financing

Please note that not every purchase order finance request is the same therefore in some cases the finance company may require the business to pledge their existing accounts receivables in order to qualify. The great news is that there are many options to customize a structure tailored to your needs.

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• Finished Goods

• Light Assembly Finance

• Hybrid Finance (a combination of invoice financing & purchase order financing)

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Industries Served

PO Financing may be the solution you need if you’re a product reseller and need capital to fulfill a purchase order.

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• Wholesalers - businesses who buys and sells

• Distributors

• Government Contractors

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Qualifying Factors

Generally to qualify it will come down to how much risk is involved in the transaction, the type of product/services being rendered, number of days it will take to get the product delivered, the transaction history between the supplier and the customer, and the gross margin. It is not uncommon for a finance company to require financials and to have a minimum revenue volume.

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Pricing

Since there are many factors that are taken into consideration for PO Financing, the rates can vary from as low as 1.50% on up to the 10% range.

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Call 936-777-3444 or click  here to schedule a free 15-minute consultation or click here to apply now. 

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