Do
you hold back your sales efforts for fear of actually getting
a large order?
Purchase Order
financing may be a solution. It is short term funding
used to finance the purchase or manufacture of specific goods
that have been pre-sold by you to a creditworthy end customer.
The cash advanced under PO funding is used to pay for the
upfront materials and labor necessary to fulfill the order
from a quality customer. Once you produce, ship,
and send an invoice for the goods - the funder will have a
Factoring company buyout it's interest. The transaction
then continues as a normal A/R factoring program.
"Call us today to
see if your company can qualify for purchase order funding. No
sales pressure . . . just my sincere effort to help you."
Secure payment to a 3rd party supplier for finished goods that
will be shipped directly to the end customer.
To pay job-specific suppliers for raw materials
To pay job-specific labor
To pay for packaging, shipping costs, duties and inspections
Basic criteria for qualifying
Client's business strength and performance
Business's ability to satisfy the PO in less than 30 days
Profit margins high enough to absorb the funding costs
Size of purchase order (minimum of $50,000)
Number and quality of suppliers
Existing factoring relationship
Alternatives to Purchase
Order funding (advancing cash to suppliers) may be the use of
Letters of Credit or Payment Assurance Letters. The letters insure
your vendors that they will be paid on time, and how they will be
paid. When vendor's minds are at ease, they often eliminate
pre-payment and C.O.D. requirements and extend payment terms.
The advance amounts and fees vary depending on each
situation. Typically, every transaction will stand on its own, based
on business history, credit worthiness, the ability of the supplier
to provide the goods or services.
Has your
company received a large order?
