Purchase Order Funding
Provides advance payment or assurance so you can buy or produce goods ordered or sold.
Purchase Order (P.O.) Funding is sometimes called other names like production or pre-delivery financing. It is used to provide short-term financing, advance payment, or assurance to a supplier on behalf of a buyer, middleman, or end-user in order to obtain and deliver goods ordered or sold.
How does it work?
A Purchase Order (P.O.) is a request from a buyer to a seller to provide goods or services. A typical purchase order would list the amount of goods or services needed and the terms and conditions of delivery and payment.
When a business receives an order for a product or service, it galvanizes its resources to fill the order. At times, a business may find itself in a position where it is unable to fulfill a customer’s order because it lacks the required materials or the money to acquire them, and it runs the risks of losing the order and customer. In such a case, our Purchase Order Funding program can help.
Our clients use it as a source of capital, payment assurance, or guarantees in the form of Letter Of Credit (LOC) to acquire finished goods and be able to fulfill their customer’s orders, as long as there is sufficient margin to accommodate both the costs of funding and be able to make a profit.
Here are some general requirements for our Purchase Order Funding:
- The products are pre-sold.
- Non-consignment sale
- Non-cancelable Purchase Order (P.O.)
- Issued by a legally registered and credit-worthy buyer or payer.
- It is preferred that the P. O. be for finished goods.
- The product is resalable in the open market incase of recovery.
- Payment guarantees or assurances will be issued directly to the suppliers on your behalf.
Relatively speaking, P. O. Funding tend to be costlier and only for short-term compared to traditional financing. It may also be easier to obtain by new and small businesses if you can meet the basic and general criteria above.
To request funding for your Purchase Order Funding, please complete and submit a purchase order funding application along with the appropriate support documents or call us at 866-717-2274.
