Culver Business Finance

Purchase Order Financing

Drive Business Growth by Improving Cash Flow

ST-purchase_orderPurchase order financing can help you if you have purchase orders that you cannot fulfill because you lack funds. As opposed to traditional bank finance, Purchase Order Financing is easy to qualify for and can be set up quickly. The main requirement is that you have an order from a credit worthy commercial or government client.

Benefits of purchase order funding

Purchase order funding is a financing option that allows you to accept purchase order, regardless of your current capital availability. It is an ideal tool for companies that have exhausted their available funds or bank options.

PO financing enables you to finance up to 100% of your supplier costs, allowing you to deliver more and bigger orders. Furthermore, PO financing has not arbitrary limits like bank financing and is directly tied to your sales. This means that all you need to do to obtain additional financing is to obtain orders from solid commercial or government customers.

PO Funding is an ideal tool for companies that sell 3rd party products such as wholesalers, distributors and resellers and are growing quickly.

Qualification criteria

To qualify for purchase order funding, companies must meet these criteria:

  1. Must be a product re-seller / distributor
  2. Must have commercial or government customers
  3. Must have a minimum of $50,000 in monthly sales
  4. Transactions must have a minimum gross profit of 20%
  5. Must not be a direct manufacturing company (using 3rd party manufacturing is allowed)

If your company sells a service or manufactures goods directly (rather than out sourcing) please use our invoice factoring services.

How does PO funding work?

Purchase order funding is simple to use. And once the account is set up, you can use it to finance all current and subsequent orders. The process is very straightforward and works as follows:

  1. Your company is awarded a purchase order from a customer
  2. We issue a letter of credit (or similar instrument) favoring your suppliers
  3. Your supplier delivers the goods
  4. The order is delivered and accepted
  5. Your company issues an invoice to your client
  6. Your client pays the invoice
  7. The transaction is settled

Qualifying for purchase order funding is quick – and easy

To qualify for PO funding, you must sell products to other businesses (or government agencies) who pay their invoices reliably in 90 days or less. Establishing a PO financing line usually takes 5 to 10 days days and most businesses can qualify, provided they have good customers and are well managed. What to find out if you qualify? Call us at (714)380-3000 or fill out the inquiry form to have someone call you.