Purchase order financing is a great way for your company to take on large jobs without worrying about the cash flow gap between paying suppliers and receiving final payment from your customers. Factor Finders finances purchase orders in a variety of industries, including government contracts and manufacturing orders.
HOW DOES PURCHASE ORDER FINANCING WORK?
The purchase order financing process is simple, and understanding it can help you plan to meet your business needs as they arise.
1. You receive a purchase order from your customers and submit it to us. We will finance up to 100 percent of the purchase order value and advance you cash to pay your suppliers or cover other expenses.
2. The supplier will inspect and ship goods to your customer. The customer will use the products to complete their project.
3. Your customer pays in 30-60 days and the purchase order is closed. Your company will receive the balance of payments not advanced, minus financing fees.
WHO QUALIFIES FOR PO FINANCING?
Purchase order finance approval decisions are based on the following criteria:
- The amount of the purchase order – the first transaction must be at least $100,000
- Experience working with similar customers
- Your suppliers’ track records
- Profit margin of greater than 20 percent, to offset costs
- Goods must be complete – that is, not in need of any further customization or installation prior to shipping
The flexibility of PO financing means there is no limit to the number of purchase orders you can submit, as long as you can fill the order and it meets your factor’s funding criteria. The amount of available cash grows with your business, allowing you to expand without adding a new liability to your balance sheet.
Call Factor Finders today at 1-855-FACTOR-1