WHAT IS PURCHASE ORDER FINANCING?
Purchase order financing is a funding option for businesses that need cash to fill single or multiple customer orders.
Purchase order financing involves one company paying the supplier of another company, for goods that have been ordered to fulfill a job for a customer.
This is an advance and may not be for the entire amount of the supplies, but it will cover a large portion of it. In some cases, companies can qualify for 100% financing.
How Purchase Order Financing Works
When you enter a purchase order financing arrangement, four parties are involved—your business, your supplier, your customer and a purchase order financing company.
Here’s an example of how it works:
1. Your company receives an order from a customer.
2. The purchase order financing company pays your supplier for goods that must be purchased to complete the order.
3. The purchase order financing company collects payment from your customer.
4. The purchase order financing company pays your company the customer invoice amount, minus fees.
Is your company a good candidate for purchase order funding?
Generally speaking, your company is a good candidate for purchase order funding if all the following are true:
You buy and then resell products without any modifications or customization
Your company does not directly manufacture the products that you sell
Your gross margins are at least 20%
Your suppliers have a good track record of delivering products and are in good financial shape
Your customers have good commercial credit
Your purchase orders are non-cancel-able and have no consignment or guaranteed sale terms
Your orders are for a minimum of $50,000
Industries Covered:
Purchase order financing can work with most types of businesses, including:
Wholesalers
Distributors
Suppliers
The Benefits of Purchase Order Financing include:
- Allows companies to grow without increased bank debt or selling equity
- Helps ensure timely deliveries to customers
- Increase market share
- Allows companies to make larger profits by fulfilling larger orders
- Fast flexible funding
- No minimum credit score is required
OVERVIEW
No upfront fees
All credits are accepted
$50,000-$50 Million
Nationwide and International
Fast Funding-10-30 days
Fast Approval-24-48 hours
Up to 100% funding
WHO USES PURCHASE ORDER FINANCING?
A wide variety of businesses use purchase order financing to address needs such as tight cash flow, growth plans or seasonal customer demand. Companies that finance their purchase orders include:
Importers/Exporters
Distributors
Wholesalers
Apparel Companies
Food Distributors and Suppliers
Oil and Gas Companies
Automotive Suppliers and Wholesalers
Transportation Companies
Janitorial Suppliers
Construction Suppliers
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Contact AMIACHI PROPERTY ADVISERS today to discuss your funding needs or if you have any questions. We look forward to hearing from you.