Purchase Order Financing Loans
- Minimal Paperwork
- No Credit Score Needed
- Short Financing Terms
- Built-in Collateral
- Practical Repayment
- Low Fees and Costs
3 months minimum credit card processing required to apply for fundingPurchase order finance helps keep businesses going.
Purchase order financing, also known as PO financing, purchase order funding, or purchase order loans, is an alternative funding solution that allows businesses to cover supplier expenses without interrupting cash flow.
Even with a strong business credit score and a decent amount of time in operation, your business could still be deemed risky by traditional tier one banks. If you’re looking for a funding solution that will help you pay suppliers without depleting your cash reserves, purchase order financing can offer a viable alternative.
What is Purchase Order Financing?
PO finance is a short-term business financing option that allows businesses to have a lender supply the money to fund an order. They’ll then collect the payment from your customer and send you the remaining balance, accrued fees and interest, to cover. This is not a no doc loan, it is a funding option that requires documentation, a physical or digital order of purchase, in order to qualify for. PO financing comes in handy when cash flow is low due to seasonality or emergencies. As a business owner, financing purchase orders might be exactly what you need to continue operations in a pinch.
24 hrs
Average Funding Time
200,000 +
Fundings Completed
1,000 +
Long-term Business Relationships
1.5 billion +
Financing Secured
Steps in the PO Financing Process
Here’s how purchase order finance works in five simple steps:
- A customer will send your business a purchase order. But, purchase orders typically take 30-90 days to collect payment for after the shipment is received by the customer, which means that you’re fronting the operational bill.
- To fulfill the purchase order, you’ll need to pay the manufacturer upfront in order to make the product. If you are running low on funds and need some extra financial help before the payment is collected, then funding the purchase order is your best bet.
- With a purchase order financing company, they will pay the supplier directly for their estimated cost of the goods, and the order can proceed.
- Once ready, the supplier then ships the products to the business, who completes their orders and invoices customers as usual.
- The customer is then notified that their balance needs to be paid directly to the purchase order finance company. Once payment is made, the PO financing provider will deduct their fees and the customer payment from the total and send the remaining balance to you to cover.
PO finance percentages
Many times the purchase order financing lender will choose to cover a portion of the order, rather than the whole thing. This may mean 60% or 90%, it just depends on the size of the PO funding needed and the estimated date of payment.
The Benefits of Purchase Order Financing
Lenders that provide purchase order loans can be an attractive option for business owners, and they should be! It gives you a second to stop worrying about how you’re going to pay employees or buy necessary equipment and lets you run your operation without a hitch. Here are a few more reasons why PO finance is gaining popularity with big and small businesses alike:
No Business Credit Score Needed - The business credit score is not evaluated. The purchase order financing company is more concerned with the creditworthiness of the customer as they are the ones who must pay the PO on time and in full.
Short Term Only - There are no long-term commitments. Purchase order finance is only meant to be a short-term solution.
Low Fees and Costs - Compared to other alternative financing options, the fees and costs of purchase order funding are generally lower than other financing products.
Happy Suppliers - The PO financing company will pay the supplier directly and on time, which saves your business from interruption.
Growth Opportunity - Through this type of funding, businesses can continue financing purchase orders they might otherwise have had to decline, even if they don't have the cash flow they need on hand.
Recently Funded Businesses
$100k
Working Capital
$50k
Restaurant Funding
$30k
Merchant Cash Advance
$75k
Business Funding
What Do I Need To Qualify for PO Financing?
Alternative lenders such as purchase order finance companies have different requirements than banks that make obtaining funds easier, but they still have a list of qualifications that must be met by applicants.
Similarly to a bridge loan financier, a purchase order financing company may request:
- The purchase order amount
- Information on the type of business you conduct
- The gross profit margin for the transaction
- A PO without a cancellation clause
- Business financial statements
- Information about the supplier
Let Us Help You Get Purchase Order Financing
Apply with our PO finance partner in as little as 5 minutes and receive alternative capital within 72 hours, or reach out for more help on what loan type is best for your business.