{"id":17056,"date":"2025-05-29T13:22:47","date_gmt":"2025-05-29T17:22:47","guid":{"rendered":"https:\/\/www.comcapfactoring.com\/ca\/?page_id=17056"},"modified":"2026-04-06T13:03:08","modified_gmt":"2026-04-06T17:03:08","slug":"po-financing","status":"publish","type":"page","link":"https:\/\/www.comcapfactoring.com\/ca\/faq\/po-financing\/","title":{"rendered":"Purchase Order Financing FAQ"},"content":{"rendered":"\n<p>This article answers the most common questions prospective clients ask about <a href=\"https:\/\/www.comcapfactoring.com\/ca\/products\/purchase-order-financing\/\">purchase order financing<\/a>. We encourage you to read it carefully before submitting information.<\/p>\n\n\n<style>.kt-accordion-id17056_c47eaf-07 .kt-accordion-inner-wrap{column-gap:var(--global-kb-gap-md, 2rem);row-gap:8px;}.kt-accordion-id17056_c47eaf-07 .kt-accordion-panel-inner{border-top:0px solid transparent;border-right:0px solid transparent;border-bottom:0px solid transparent;border-left:0px solid transparent;background:#ffffff;padding-top:var(--global-kb-spacing-sm, 1.5rem);padding-right:var(--global-kb-spacing-sm, 1.5rem);padding-bottom:var(--global-kb-spacing-sm, 1.5rem);padding-left:var(--global-kb-spacing-sm, 1.5rem);}.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header{border-top:0px solid #f2f2f2;border-right:0px solid #f2f2f2;border-bottom:4px solid #f2f2f2;border-left:0px solid #f2f2f2;border-top-left-radius:0px;border-top-right-radius:0px;border-bottom-right-radius:0px;border-bottom-left-radius:0px;background:#ffffff;color:#0a3c70;padding-top:14px;padding-right:10px;padding-bottom:6px;padding-left:16px;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle )  > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle )  > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap .kt-blocks-accordion-icon-trigger:before{background:#0a3c70;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-icon-trigger{background:#0a3c70;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-icon-trigger:before{background:#ffffff;}.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header:hover, \n\t\t\t\tbody:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07 .kt-blocks-accordion-header:focus-visible{color:#000000;background:#0a3c70;border-top-color:#eeeeee;border-top-style:solid;border-right-color:#eeeeee;border-right-style:solid;border-bottom-color:#eeeeee;border-bottom-style:solid;border-left-color:#eeeeee;border-left-style:solid;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle ) .kt-accordion-header-wrap .kt-blocks-accordion-header:hover .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle ) .kt-accordion-header-wrap .kt-blocks-accordion-header:hover .kt-blocks-accordion-icon-trigger:before, body:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle ) .kt-blocks-accordion--visible .kt-blocks-accordion-icon-trigger:after, body:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle ) .kt-blocks-accordion-header:focus-visible .kt-blocks-accordion-icon-trigger:before{background:#000000;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:hover .kt-blocks-accordion-icon-trigger, body:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible .kt-blocks-accordion-icon-trigger{background:#000000;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:hover .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:hover .kt-blocks-accordion-icon-trigger:before, body:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible .kt-blocks-accordion-icon-trigger:after, body:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible .kt-blocks-accordion-icon-trigger:before{background:#0a3c70;}.kt-accordion-id17056_c47eaf-07 .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible,\n\t\t\t\t.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header.kt-accordion-panel-active{color:#0a3c70;background:#ffffff;border-top-color:#0a3c70;border-top-style:solid;border-right-color:#0a3c70;border-right-style:solid;border-bottom-color:#0a3c70;border-bottom-style:solid;border-left-color:#0a3c70;border-left-style:solid;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle )  > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header.kt-accordion-panel-active .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basiccircle ):not( .kt-accodion-icon-style-xclosecircle ):not( .kt-accodion-icon-style-arrowcircle )  > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header.kt-accordion-panel-active .kt-blocks-accordion-icon-trigger:before{background:#0a3c70;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-header.kt-accordion-panel-active .kt-blocks-accordion-icon-trigger{background:#0a3c70;}.kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-header.kt-accordion-panel-active .kt-blocks-accordion-icon-trigger:after, .kt-accordion-id17056_c47eaf-07:not( .kt-accodion-icon-style-basic ):not( .kt-accodion-icon-style-xclose ):not( .kt-accodion-icon-style-arrow ) .kt-blocks-accordion-header.kt-accordion-panel-active .kt-blocks-accordion-icon-trigger:before{background:#ffffff;}@media all and (max-width: 1024px){.kt-accordion-id17056_c47eaf-07 .kt-accordion-panel-inner{border-top:0px solid transparent;border-right:0px solid transparent;border-bottom:0px solid transparent;border-left:0px solid transparent;}}@media all and (max-width: 1024px){.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header{border-top:0px solid #f2f2f2;border-right:0px solid #f2f2f2;border-bottom:4px solid #f2f2f2;border-left:0px solid #f2f2f2;}}@media all and (max-width: 1024px){.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header:hover, \n\t\t\t\tbody:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07 .kt-blocks-accordion-header:focus-visible{border-top-color:#eeeeee;border-top-style:solid;border-right-color:#eeeeee;border-right-style:solid;border-bottom-color:#eeeeee;border-bottom-style:solid;border-left-color:#eeeeee;border-left-style:solid;}}@media all and (max-width: 1024px){.kt-accordion-id17056_c47eaf-07 .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible,\n\t\t\t\t.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header.kt-accordion-panel-active{border-top-color:#0a3c70;border-top-style:solid;border-right-color:#0a3c70;border-right-style:solid;border-bottom-color:#0a3c70;border-bottom-style:solid;border-left-color:#0a3c70;border-left-style:solid;}}@media all and (max-width: 767px){.kt-accordion-id17056_c47eaf-07 .kt-accordion-inner-wrap{display:block;}.kt-accordion-id17056_c47eaf-07 .kt-accordion-inner-wrap .kt-accordion-pane:not(:first-child){margin-top:8px;}.kt-accordion-id17056_c47eaf-07 .kt-accordion-panel-inner{border-top:0px solid transparent;border-right:0px solid transparent;border-bottom:0px solid transparent;border-left:0px solid transparent;}.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header{border-top:0px solid #f2f2f2;border-right:0px solid #f2f2f2;border-bottom:4px solid #f2f2f2;border-left:0px solid #f2f2f2;}.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header:hover, \n\t\t\t\tbody:not(.hide-focus-outline) .kt-accordion-id17056_c47eaf-07 .kt-blocks-accordion-header:focus-visible{border-top-color:#eeeeee;border-top-style:solid;border-right-color:#eeeeee;border-right-style:solid;border-bottom-color:#eeeeee;border-bottom-style:solid;border-left-color:#eeeeee;border-left-style:solid;}.kt-accordion-id17056_c47eaf-07 .kt-accordion-header-wrap .kt-blocks-accordion-header:focus-visible,\n\t\t\t\t.kt-accordion-id17056_c47eaf-07 > .kt-accordion-inner-wrap > .wp-block-kadence-pane > .kt-accordion-header-wrap > .kt-blocks-accordion-header.kt-accordion-panel-active{border-top-color:#0a3c70;border-top-style:solid;border-right-color:#0a3c70;border-right-style:solid;border-bottom-color:#0a3c70;border-bottom-style:solid;border-left-color:#0a3c70;border-left-style:solid;}}<\/style>\n<div class=\"wp-block-kadence-accordion alignnone\"><div class=\"kt-accordion-wrap kt-accordion-id17056_c47eaf-07 kt-accordion-has-20-panes kt-active-pane-0 kt-accordion-block kt-pane-header-alignment-left kt-accodion-icon-style-arrowcircle kt-accodion-icon-side-left\" style=\"max-width:none\"><div class=\"kt-accordion-inner-wrap\" data-allow-multiple-open=\"false\" data-start-open=\"none\">\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-1 kt-pane17056_3039ef-0a\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>1. What transactions can you finance with PO funding?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Purchase order funding can only be used to finance transactions in which your company is re-selling a completed product (e.g., finished goods) to another company or government agency. Your company must buy the finished goods from a supplier, distributor, or a third-party manufacturing company.<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0, .wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0[data-kb-block=\"kb-adv-heading17056_45b8be-c0\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0 mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0[data-kb-block=\"kb-adv-heading17056_45b8be-c0\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}.wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0 img.kb-inline-image, .wp-block-kadence-advancedheading.kt-adv-heading17056_45b8be-c0[data-kb-block=\"kb-adv-heading17056_45b8be-c0\"] img.kb-inline-image{width:150px;vertical-align:baseline;}<\/style>\n<p class=\"kt-adv-heading17056_45b8be-c0 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading17056_45b8be-c0\"><strong>Note: <\/strong>Transactions where the product requires more than one supplier tend to be challenging to finance. These transactions will be evaluated on a case-by-case basis. These include transactions where raw materials are provided by one supplier and shipped to a second supplier for finishing.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-4 kt-pane17056_dade8e-88\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>2. Are there transactions that you cannot finance with PO funding?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Purchase order financing <strong>cannot <\/strong>be used to finance manufacturing companies, service contracts, support contracts, consulting engagements, buildouts, or construction projects.<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28, .wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28[data-kb-block=\"kb-adv-heading17056_1f674c-28\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28 mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28[data-kb-block=\"kb-adv-heading17056_1f674c-28\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}.wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28 img.kb-inline-image, .wp-block-kadence-advancedheading.kt-adv-heading17056_1f674c-28[data-kb-block=\"kb-adv-heading17056_1f674c-28\"] img.kb-inline-image{width:150px;vertical-align:baseline;}<\/style>\n<p class=\"kt-adv-heading17056_1f674c-28 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading17056_1f674c-28\"><strong>Note:<\/strong> manufacturing companies should consider using supplier financing, which provides many of the benefits of PO financing.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-19 kt-pane17056_c9dc86-5d\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>3. What is the smallest transaction you can finance?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>The minimum transaction we can finance is $100,000. We\u2019re unable to accommodate smaller transactions.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-20 kt-pane17056_f72d66-39\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>4. What is the minimum gross margin you will consider for a transaction?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Purchase order financing is designed for transactions with a gross margin of at least 30%. In certain cases, we may consider margins as low as 20%. However, this solution isn\u2019t suitable for transactions with gross margins below 20%.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-5 kt-pane17056_d01347-35\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>5. Can you finance orders that include products and services?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>We can finance only purchase orders that sell products. Unfortunately, we are unable to finance orders that include a service component. Examples of services include installation, assembly, configuration, consulting, etc.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-12 kt-pane17056_c669ed-da\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>6. What is the smallest transaction we can finance?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>The smallest transaction we can finance is $100,000. We don\u2019t have defined maximum transaction limits, and we can finance transactions in the millions of dollars, provided they are well structured.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-7 kt-pane17056_d9fd8b-87\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>7. How will my foreign supplier get paid?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>All overseas suppliers are paid either through a letter of credit or cash against shipping documents. We can provide a letter of credit before they begin working on your order. These methods ensure payment to your supplier, provided they shipped their product to you.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-8 kt-pane17056_668513-be\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>8. Why can\u2019t you advance payments via wire\/cash to my foreign suppliers?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>We can pay only via a letter of credit or cash against documents. Both ensure payment to the supplier and guarantee the delivery of the goods that meet your purchase order\u2019s specifications.<br>A cash prepayment to your supplier<strong> <em>exposes your company to a financial double <\/em><\/strong><em>jeopardy<\/em>. This is best explained with an example. Let\u2019s say the finance company prepays your supplier, but the supplier <em><strong>does not deliver the goods<\/strong><\/em>. This leaves you without the product, liable to your client, and liable to the finance company. Obviously, you want to avoid this situation.<br>There are two possible reasons a supplier would ask you for a prepayment. The first reason is that the supplier is unfamiliar with your company and is unwilling to provide you with credit terms. Purchase order financing is designed to help you with this situation. We offer to pay your supplier with a letter of credit. Letters of credit provide your supplier with a guaranteed form of payment as long as they deliver according to your purchase order.<br>The second reason a supplier may ask for a prepayment is that they are not doing well financially. In other words,<em> <strong>they don\u2019t have the resources to fulfill your order unless you pay them first<\/strong><\/em>. By asking you to prepay them, your supplier is asking you to take the risk and finance them. We view these situations as very risky and are unable to provide financing.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-9 kt-pane17056_193f35-c3\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>9. How will my US \/ Canada suppliers get paid?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>This depends on the payment terms with your suppliers. If they give you net-30 to net-60 day terms after shipping, we can usually pay by wire transfer per your regular terms. If your supplier requires an upfront payment, we can pay them using a letter of credit.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-10 kt-pane17056_59af9e-6e\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>10. Can you provide prepayment in cash to my local (US\/Canada) suppliers?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>We may consider making a prepayment only to suppliers that meet all these conditions:<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec, .wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec[data-kb-block=\"kb-adv-heading17056_5c0316-ec\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec[data-kb-block=\"kb-adv-heading17056_5c0316-ec\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}.wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec img.kb-inline-image, .wp-block-kadence-advancedheading.kt-adv-heading17056_5c0316-ec[data-kb-block=\"kb-adv-heading17056_5c0316-ec\"] img.kb-inline-image{width:150px;vertical-align:baseline;}<\/style>\n<p class=\"kt-adv-heading17056_5c0316-ec wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading17056_5c0316-ec\">a) Large company (i.e., Fortune 500)<br>b) Excellent track record<br>c) Excellent commercial credit<br>d) Demonstrated financial stability<\/p>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24, .wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24[data-kb-block=\"kb-adv-heading17056_b27a72-24\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24 mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24[data-kb-block=\"kb-adv-heading17056_b27a72-24\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}.wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24 img.kb-inline-image, .wp-block-kadence-advancedheading.kt-adv-heading17056_b27a72-24[data-kb-block=\"kb-adv-heading17056_b27a72-24\"] img.kb-inline-image{width:150px;vertical-align:baseline;}<\/style>\n<p class=\"kt-adv-heading17056_b27a72-24 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading17056_b27a72-24\">Please note that most transactions are done using a letter of credit.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-11 kt-pane17056_729409-50\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>11. Can you finance transactions that involve multiple suppliers?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Generally, transactions with a single supplier for the order are the simplest to execute. Transactions that include multiple suppliers have to be examined on an individual basis to determine if we can finance them.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-13 kt-pane17056_97a7c2-e0\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>12. Do you fund startups?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>We can finance companies that are relatively new, as long as they have sold the product before and can show a few successful transactions. We ask for a track record with a few successful transactions because it demonstrates that all the major supply chain and logistics issues have been ironed out.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-15 kt-pane17056_0bad6e-2b\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>13. This is a brand-new product that has never been sold. Can purchase order financing help me?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>We are unable to finance transactions that involve products with no track record. However, we <em>can <\/em>consider transactions of products that have had a few initial sales transactions. This is similar to the situation in question #10<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-16 kt-pane17056_81cb3f-c9\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>14. Is there a due diligence cost?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>There is a due diligence cost to set up an initial account. This cost varies and is determined by the size and complexity of your transaction.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-17 kt-pane17056_2893f7-b0\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>15. Is a product inspection required? If so, why, and who pays for it?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Most transactions require that the goods be inspected by a third-party company, such as SGS. This ensures that the goods meet the requirements outlined in your purchase order. This reduces the risk of the transaction for all parties. Your company usually covers the cost of the inspection. Note that inspection requirements are determined for each transaction individually.<\/p>\n<\/div><\/div><\/div>\n\n\n\n<div class=\"wp-block-kadence-pane kt-accordion-pane kt-accordion-pane-18 kt-pane17056_105391-e2\"><div class=\"kt-accordion-header-wrap\"><button class=\"kt-blocks-accordion-header kt-acccordion-button-label-show\" type=\"button\"><span class=\"kt-blocks-accordion-title-wrap\"><span class=\"kt-blocks-accordion-title\"><strong>16. How long will it take you to fund my transaction?<\/strong><\/span><\/span><span class=\"kt-blocks-accordion-icon-trigger\"><\/span><\/button><\/div><div class=\"kt-accordion-panel kt-accordion-panel-hidden\"><div class=\"kt-accordion-panel-inner\">\n<p>Setting up a financing line takes a couple of weeks, provided we receive all the information that we ask for in a timely manner. Once the account has been established, subsequent transactions can be funded much faster. <em><strong>Please keep in mind that some items in the setup process are beyond our control and may affect the setup timeline.<\/strong><\/em><\/p>\n<\/div><\/div><\/div>\n<\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>This article answers the most common questions prospective clients ask about purchase order financing. We encourage you to read it carefully before submitting information.<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":17055,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"_kad_blocks_custom_css":"","_kad_blocks_head_custom_js":"","_kad_blocks_body_custom_js":"","_kad_blocks_footer_custom_js":"","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"class_list":{"0":"post-17056","1":"page","2":"type-page","3":"status-publish","5":"entry"},"acf":[],"taxonomy_info":[],"featured_image_src_large":false,"author_info":{"display_name":"Marco Terry","author_link":"https:\/\/www.comcapfactoring.com\/ca\/blog\/author\/marcoterry\/"},"comment_info":0,"_links":{"self":[{"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/pages\/17056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/comments?post=17056"}],"version-history":[{"count":0,"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/pages\/17056\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/pages\/17055"}],"wp:attachment":[{"href":"https:\/\/www.comcapfactoring.com\/ca\/wp-json\/wp\/v2\/media?parent=17056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}