What is Purchase Order Funding?

It is providing a business with cash to fill its purchase order and thus enable it to deliver the goods and / or services to its customer.

How does it Work?

Upon receiving a purchase order from your customer and submitting a cost breakdown to your funder, the funder will advance cash to your vendors and / or to your company to cover the cost of material and labor necessary to provide the goods and / or services.  The advance could cover other costs such as shipment, customs, etc., but it generally does not cover overhead or profit and it does not exceed a certain percentage of the purchase order.Upon delivery of the goods and / or services to your customer, the purchase order then can be turned into an invoice. The P.O. funder is paid back his advance and fee, usually by your factor, from the proceeds generated by the invoice.

Benefits of Purchase Order Funding

P.O. funding allows you to fulfill the purchase orders of your customers when you do not have the sufficient funds to do that. It is a fast way of obtaining cash to fulfill your orders and expand your business without losing any equity.

Do You Qualify For P.O. Funding?

If you have a purchase order from a creditworthy customer and you have performance track record of delivering such product and / or service, then you generally qualify for P.O. funding.

For more information, please contact us.