Secure Funding for Your Business with Purchase Order Financing from BSF
Get the Cash You Need to Fulfill Orders and Grow Your Business, Regardless of Your Credit Score or Financial Situation
- Contact us to learn more about P.O. Financing
Call us at 212-258-0602 to speak to a loan specialist today
What is Purchase Order Financing?
Purchase order finance, or PO financing, is a sort of capital that enables small firms to fulfill client orders even when they lack the requisite cash flow or credit. PO financing is a third-party financial institution’s advance payment provided to suppliers or manufacturers, which is subsequently reimbursed by the firm after the products or services are delivered to the client.
Purchase Order Financing Costs
Monthly financing costs for purchase orders are typically 2%-6% of the total order amount. This may not seem like a lot now, but keep in mind that these charges may mount up. A loan with a monthly rate of 3.5% would have an annual percentage rate (APR) of almost 40%.
Although it’s not free, buy order financing can help small firms that have orders to satisfy but lack the cash on hand. To assist our clients remain competitive and develop, we explore all available financing solutions, including buy order financing.
How Does Purchase Order Financing Work?
- Financing purchase orders or purchase order loans allow small businesses to fulfill orders they can't afford to finance on their own.
- The business applies for purchase order financing and if approved, the financing company covers up to 100% of the supplier's costs.
- The financing company pays the supplier directly, either with cash or a letter of credit, once they approve the application.
- The customer receives their order and the business sends them an invoice, along with an invoice copy to the financing company.
- The customer pays the financing company directly, and once the finance company receives payment, they deduct their fee and transfer the remaining balance to the business.
- Purchase
How To Get Purchase Order Financing
Looking to obtain funding for your purchase order? Here are some factors to consider to ensure that you are eligible for funding:
- Check if your transaction meets the lender's requirements. Some lenders may only finance certain types of products or require a minimum transaction amount.
- Ensure that your customer has a good credit history. The lender will consider your customer's creditworthiness when funding your purchase order.
- Work with a reliable supplier. Lenders prefer to finance orders from established suppliers with no financial problems.
- Make sure that your company is qualified. The lender may review your financial statements, supplier and client contracts, and public records to determine if your business can execute the order.
- Be a qualified business owner. Lenders prefer to work with business owners with relevant experience and no legal problems.
At Brooke Stone Funding, we offer funding for purchase orders to help small businesses stay competitive and grow. Contact us today
