Purchase Order Funding
Has your company received a large order?
Do you hold back your sales efforts for fear of actually getting a large order?
Purchase Order (PO) financing may be a solution. It is short term funding used to finance the purchase or manufacture of specific goods that have been pre-sold by you to a creditworthy customer.
The cash advanced under PO funding is used to pay for the upfront materials and labor necessary to fulfill the order from a quality customer. Once you produce and ship the goods, and send an invoice for the goods, the PO funder will have a factoring company buy out its interest. The transaction then continues as a normal A/R factoring program.
Purchase Order Funding allows clients to accomplish the following:
Secure payment to a third party supplier for finished goods that will be shipped directly to the end customer to:
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Pay job-specific suppliers for raw materials
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Pay job-specific labor
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Pay for packaging, shipping costs, duties and inspections
Basic criteria for qualifying:
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Client's business strength and performance
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Profit margins high enough to absorb the funding costs
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Size of purchase order
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Number and quality of suppliers
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Existing factoring relationship
Alternatives to PO funding (advancing cash to suppliers) may be the use of Letters of Credit (LOC) or Payment Assurance Letters. The letters insure your vendors that they will be paid on time and detail how they will be paid. When vendor's minds are at ease, they often eliminate pre-payment and C.O.D. requirements and extend payment terms.
The advance amounts and fees vary depending on each situation. Typically, every transaction will stand on its own, based on business history, creditworthiness, the ability of the supplier to provide the goods or services.
If you are a government vendor and are interested in being pre-qualified for funding, please visit our Government Vendor Program Page.
PROBLEM: You Are Interested In Getting Money Now!
SOLUTION: Let Us Help You Today!
How Can You Get Started Today?
Start by completing the Profile below. The attached form (not a binding obligation) is to assist us in obtaining preliminary information about your financing needs. All information given is retained in the strictest confidence and will only be used by your Business Finance professional to evaluate your company's specific needs. Upon receipt of your information, you will be contacted to answer any questions that you may have and to explain the services that may best suit your company. Or for a “complimentary consultation” and to learn more about our financing programs that can keep your business in complete financial control, call 888-601-5777 today or email us at info@gatewaytocapital.com. |