PO Finance

Why Guaranteed Sales Clauses Prevent You From Getting Purchase Order Financing

It’s not uncommon for us to speak to a prospect who is very excited about a large purchase order they just received from a very reputable company. Furthermore, as we review the details of the order, we believe that the order will be a good candidate for purchase order financing because it meets these three […]

Advantages and Disadvantages of Purchase Order Financing

In recent years, purchase order financing has been gaining popularity as a way to finance a company that has received a large purchase order. It can be a great solution for companies that need financing to fulfill a large purchase order. PO financing: Is designed specifically to help wholesalers and distributors who resell products to commercial customers Is […]

How Does Purchase Order Funding Work?

Purchase order funding is one of the most misunderstood products in the factoring industry. In part, this is probably because the name is both generic and very enticing. Most companies assume that purchase order funding simply gives your company money (directly), using your purchase orders as collateral. Unfortunately, this is not accurate. This article will […]

Purchase Order Financing Qualification Requirements

Qualifying for purchase order (PO) financing is easier than qualifying for most conventional business financing solutions. However, to qualify for funding, your company must meet some requirements. Through a process called “due diligence,” purchase order finance companies evaluate your transaction to determine if it is a good candidate for funding. This article discusses what PO finance […]

Why Do Purchase Order Financing Companies Only Prepay Foreign Suppliers With a Letter of Credit?

Most of our purchase order (PO) financing clients are importers who buy goods from another country and sell them to companies in the US or Canada. Some of these importers usually request that we prepay their supplier by wire transfer. While purchase order financing companies can pay foreign suppliers with a letter of credit, documentary collection, or wire […]

Using Purchase Order Financing To Fund Commodities Transactions

Purchase order (PO) financing would appear to be an ideal solution to finance commodity sale transactions. Most commodity brokers are intermediary companies buying products such as sugar, metal ore, coffee, and such, and reselling them for profit by getting a commission on the transaction — usually the difference between the purchase and sale price. Many of these transactions […]

Should You Use Factoring With Purchase Order Financing?

Purchase order (PO) financing companies often advise prospective clients to also work with a factoring company. For many transactions (though not for all), combining both products reduces the total cost. This is because the cost per dollar for factoring is usually lower than the cost per dollar of PO financing. When combining these products, the transaction starts as […]

Who Can Use Purchase Order Financing?

One of the primary dilemmas about purchase order (PO) financing is that – although it’s a flexible product – it can only help a narrow set of companies. This article helps you understand PO financing and determine if your company is a good candidate for it. Basic requirements The requirements for PO financing are fairly simple, though they narrow the […]

How Purchase Order Financing Can Help Resellers and Wholesalers

Most wholesalers and resellers have a relatively simple business model: they buy goods from suppliers (local or foreign) and resell them at a markup to corporate clients. Although the business model may be simple, running this type of a business is not easy. Managing the cash flow can be difficult, which can limit your ability to […]

Financing An Import Business with Purchase Order Funding

Product importers are accustomed to dealing with long, grueling cash flow cycles. On one hand, foreign suppliers often demand prepayment before manufacturing and shipping an order. This requirement is often non-negotiable. However, prepaying suppliers often ties your funds for 30 to 60 days, depending on their manufacturing schedules and shipping time frames. On the other hand, if […]