Purchase Order Financing, also known as Purchase Order Funding, is a financial tool that is used to meet the needs of manufacturers and wholesalers who lack the capital to fill an order from their customer. The most common reasons companies seek PO Financing are limited cash and limited credit from suppliers.
Purchase Order Financing allows smaller companies the opportunity to take advantage of large orders they may not be accustomed to. Many companies simply cannot afford to use all of their cash on hand to fulfill an order that may take a lengthy period of time before they receive payment. Bigger orders that are profitable are hard to come by for many companies and can positively alter the course of future sales if they can be fulfilled. Passing on an opportunity is disheartening to any owner and often will close the door on future business from a customer or prospect. Purchase Order Funding with Beacon Business Capital can solve this dilemma and provide the financial capacity to fill large orders.
Purchase Order Funding can provide up to 100% of the cost of pre-sold goods on domestic or international transactions.
PO Financing Benefits
- Transactional product – use only when you need it
- Can easily be set up for use within 1-2 weeks
- Available to companies of all sizes including start-ups
- Is easier to acquire and more expedient than bank funding
- You are a distributor or re-seller
- You have orders of $30,000 or greater
- You are selling to a commercial or government entity
- You have a profit margin of 25% or greater built in to your sale
- You are filling orders that do NOT have a guaranteed sale or consignment
Is PO Funding a Fit for Your Company?
- You need funding to cover supplier expenses
- You have experience in your industry
- You have an order from a creditworthy customer
- Your product sale will not require any modifications prior to delivery other than packaging or labeling
- Your supplier has the experience and capacity to fill your order
The cost associated with Purchase Order Financing is determined by a number of influences such as the transaction amount, creditworthiness of your customer, supplier capacities, your industry experience, etc. The cost will also be affected by the transaction duration, meaning the time period between deployment of funds and transaction payoff. Are you ready to discuss Purchase Order Financing for your business? Call Beacon Business Capital at 713-828-9085 and share your needs with us. We’ll quickly determine if PO Funding is right for your business and if your transaction qualifies.