Purchase Order Financing
Fund production and fulfill large orders without depleting your cash reserves. Say yes to profitable opportunities you'd otherwise have to turn down.
Capital for the orders you've already won.
The problem
You landed the order. The customer is ready to buy. The profit margin looks great. There's just one problem:
You need $100K, $250K, or $500K+ to buy materials and fulfill the order, but you don't have that much cash sitting around.
Your bank won't increase your line fast enough. You can't ask the customer to pay upfront. And you definitely don't want to turn down a profitable opportunity just because of a timing gap.
The result
You're forced to turn down profitable business because you lack the working capital to fulfill orders. Growth opportunities slip away while you watch from the sidelines.
The solution
Purchase Order financing provides capital directly to your suppliers so you can fulfill the order. You deliver to the customer, get paid, and repay the financing from the proceeds. You capture the profit without risking your cash reserves.
The mechanics
Purchase Order financing provides the capital needed to pay your suppliers or manufacturers so you can fulfill customer orders. Unlike loans or credit lines, PO financing is tied to specific purchase orders and repaid when your customer pays.
Your customer places an order. The value is $50K, $500K, or more. You have the order but need capital to pay your supplier for materials, components, or finished goods to fulfill it.
Once approved, we pay your supplier directly for the goods needed to fulfill the customer order. You don't receive cash. We fund the production or purchase on your behalf.
Goods are delivered to you (or shipped directly to your customer). You fulfill the order according to the purchase order terms, adding any value (assembly, customization, etc.) as needed.
When your customer pays the invoice (often factored for immediate cash), we're repaid from the proceeds plus our fee. You keep the profit margin. The cycle can repeat for new orders.
Why it works
Stop turning down profitable orders because you lack upfront capital. PO financing lets you accept orders that would otherwise exceed your working capital capacity.
Scale your business by taking on larger customers and bigger orders. Your growth isn't limited by your cash reserves. It's limited by your ability to source profitable orders.
Keep your cash reserves for operations, payroll, and emergencies. Don't tie up all your capital in one large order. PO financing funds the order while you maintain financial flexibility.
When a customer places a large order, you need capital now. Not in 6 weeks. PO financing decisions in 3-5 business days, funding to suppliers within days of approval.
PO financing isn't debt you carry on your balance sheet. It's transaction-specific, tied to the order, repaid when the customer pays. Use it when you need it, not permanently.
Fit
PO financing works best for product businesses with clear supplier relationships and creditworthy customers. Here's who typically benefits:
Product-Based Businesses — You buy products/materials from suppliers and resell to customers
Large Order Opportunities — Orders that exceed your current working capital capacity
Creditworthy Customers — Your customers have good credit and payment history
Clear Supplier Relationships — You have established supplier relationships and clear pricing
Healthy Profit Margins — Gross margins of 25%+ (need margin to cover financing costs and still profit)
Verifiable Orders — Legitimate purchase orders from real customers, not speculative
Service business with no product/supplier component
Low profit margins (under 20%) leaving little room for financing costs
Customers with poor credit or unreliable payment history
Speculative orders without confirmed purchase orders
Very small orders (typically $25K minimum)
PO financing serves product-based businesses that receive confirmed orders from creditworthy buyers but lack the capital to fund production or procurement: manufacturers, distributors, importers, government contractors, and consumer products companies. Strongest fit for businesses where order values exceed available cash reserves.
Tell us a little about your purchase order and we'll come back with real numbers: advance rate, fee, and timeline.
Same-day preliminary answer
Run your numbers
See the profit left after financing an order you cannot cover out of pocket.
PO Financing CalculatorThe alternatives
| PO Financing | Invoice Factoring | Bank Loan | Line of Credit | |
|---|---|---|---|---|
| When to Use | Before you invoice (funding production) | After you invoice (funding receivables) | Any time (general purpose) | Ongoing needs (revolving) |
| What's Financed | Supplier payment for specific order | Outstanding customer invoices | General business purposes | Varies (working capital) |
| Repayment | From customer payment on that order | From customer paying invoice | Fixed schedule | Revolving draws/repays |
| Approval Based On | Customer credit + order validity | Customer credit + invoice quality | Your credit + collateral | Your credit history |
| Speed | 3-7 business days | 2-5 business days | 4-8 weeks | 2-4 weeks (initial) |
| Best For | Large orders you can't fund | Payment timing gaps | Major investments | Predictable ongoing needs |
PO financing happens BEFORE you invoice. It funds production/fulfillment. Factoring happens AFTER you invoice. It provides cash for outstanding invoices. Many businesses use both: PO financing to fulfill the order, then factoring to get immediate cash when invoicing.
Bank loans provide general capital you must repay on schedule. PO financing funds specific orders and is repaid from that order's proceeds. PO financing is transaction-specific. Loans are general purpose.
Many businesses use PO financing and factoring together: PO financing funds supplier payment to fulfill the order, then factoring provides immediate cash when the customer is invoiced. This combination solves both the production funding and payment timing challenges.
Getting started
Share the purchase order, customer information, and supplier details. We'll review the order validity, customer creditworthiness, and supplier reliability to determine feasibility.
We verify your customer's creditworthiness and ability to pay. Since the customer's payment funds the repayment, their credit is critical. We're evaluating the end customer, not just your credit.
We contact your supplier to verify pricing, delivery terms, and establish payment arrangements. We need to ensure your supplier will accept direct payment from us and deliver as promised.
If approved, we provide clear terms showing our fee, advance percentage (typically 80-100% of supplier cost), and repayment structure. You'll see exactly what it costs and how it works.
We pay your supplier directly. Goods are produced/delivered. You fulfill the customer order, invoice them, and coordinate repayment (often through factoring the invoice).
Typical timeline: 3-7 business days from order submission to supplier payment (subsequent orders faster once established)
In depth
PO financing and invoice factoring form a natural sequence. PO financing funds the production or procurement phase (before delivery). Factoring accelerates payment after delivery (before the customer pays). Combined, these two products cover the entire order-to-cash cycle. A distributor who receives a $1M purchase order uses PO financing to buy the inventory, delivers to the customer, then factors the resulting invoice for immediate cash.
Common questions
Typically $25K to $1M+ per order, depending on the customer creditworthiness and order validity. We focus on your customer's ability to pay, not rigid limits. Multiple orders can be financed simultaneously.
Costs vary based on order size, customer credit, timeline, and complexity. Fees are typically disclosed upfront as a percentage of the order value. Costs are higher than factoring (3-6% range) because we're taking more risk funding production before invoicing.
No. Use it when you need it, for orders that exceed your capital capacity. You're not required to finance every order. Most businesses use PO financing for select large orders while funding smaller orders from cash flow.
Typically 30-90 days from invoice date, depending on the payment terms in the purchase order. We'll review the customer's payment history to ensure terms are realistic and acceptable.
Yes, and many businesses do. PO financing funds the supplier payment to fulfill the order. Then when you invoice the customer, factor that invoice for immediate cash. This solves both the production funding and payment timing challenges.
They may or may not, depending on structure. In some cases, customers are notified (especially if combined with factoring). In others, the arrangement is between you, us, and your supplier. We'll explain the specifics.
This is a key risk we evaluate during approval. We look for confirmed purchase orders from creditworthy customers with established relationships. We may require recourse provisions where you're responsible if the customer doesn't pay.
Yes, we can finance orders from international customers or payment to international suppliers, though this adds complexity. We'll evaluate the customer credit, supplier reliability, and shipping/delivery logistics.
No. PO financing is for specific confirmed purchase orders from real customers. It's not for speculative inventory purchases you hope to sell later. That's what inventory financing or ABL is for.
Bank loans provide general capital you repay on schedule. PO financing funds specific orders and is repaid from that order's proceeds. PO financing is also typically faster to arrange and based on customer credit, not just your credit.
In practice
Distributor Lands Major Retailer
Manufacturer Wins Large Contract
Government Contractor Equipment Purchase
E-commerce Growth Opportunity
After you fulfill the order and invoice, factor the invoice for immediate cash. PO financing + factoring together provides complete order-to-cash financing.
Learn moreFor businesses with ongoing large order volume, ABL provides revolving credit against receivables and inventory. A step up from transaction-specific PO financing.
Learn moreIf the order requires new equipment to fulfill, equipment financing preserves your working capital while PO financing covers the production costs.
Learn moreWhether you've landed a major customer, won a significant contract, or received an order that exceeds your cash reserves, PO financing provides the capital to fulfill it and capture the profit. Let's review your specific order.
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