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Purchase order finance (also called purchase order funding) is an advance against your customers purchase order to pay your supplier for the cost of goods sold. Funds are paid direct to the supplier via wire or letter of credit. PO funding is done on a purchase order by purchase order basis. You cannot use PO funding to purchase inventory to sell at a later date.

Locations Available : 


Funding Amount : 

Eligible Projects : 


Fees : 



Advantages : 

USA & Canada

$200 Thousand to $3 Million USD (up to 80% of your customer's purchase order amount)

Any Existing Operating Business with Purchase Order contracts and Accounts Receivable can apply.  Successful applicants typically have an annual revenu from $300,000 to $36,000,000.


Between 2-3% of the amount advanced to your supplier for 30-days.  

If PO funding is needed for more than 30 days then a fraction thereof is charged for every 10 to 15 days thereafter.

Not for work-in-progress PO Funding

  • PO Funding allows you to grow your business fast and take on new orders without worrying about supplier costs

  • PO funding helps you negotiate discounts with your suppliers

  • Issuing a letter of credit protects you against suppliers by requiring a deliverable for payment

  • PO funding is used in lieu of supplier terms and a great tool for new companies looking to expand but do not have the credit history to do so.

  • PO funding can help you grow fast without putting in any of your own money



What are some examples of different types of Purchase Order Funding? 

Example 1: In this example, the client is selling a well-known product, the client is not touching the product & it is being drop shipped from a well known supplier to a well-known customer. This is the simplest transaction and relatively easy to approve.

Example 2: This example is one that requires a contract manufacturing agreement where the client has designed a product line and hires a contract manufacturer to manufacture the product. In this scenario, the funding company must be confident that the client has arranged the fabrication of the product to meet the requirements of the customer and that it will be delivered in the timeframe stated on the
purchase order. The supplier is typically paid via a letter of credit. If the goods are first sent to the client’s warehouse for sorting and packaging and then shipped to multiple customers then the funder would need to trust that the client can perform this relatively simple task and how they could step in and take over the task if the client failed. It would be preferable if the client was using a 3rd party warehouse for sorting, packaging and freight forwarding.  The funder would then enter into a warehouse agreement to control
the inventory.

Example 3: In this example, the client is fabricating or manufacturing the product themselves and needs the funding company to purchase components of materials for them to assemble or to manufacture into a product. In this example, the funding company must be confident that the client has the skills to build according to customer requirement, be able to deliver according to required delivery dates and has the
financial capacity to pay the cost of labor and overhead while the fabrication is ongoing.

Alternatively supply chain finance may be a viable option for more established companies.


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