Purchase Order Finance Glossary

Letter of Credit
A bank commitment on behalf of a client, to pay a beneficiary a stated amount of money under specified conditions.
Invoice Factoring
The sale of accounts receivable invoices at a discount for immediate cash
Purchase Order
Official document or form prepared by a buyer for the purpose to purchase goods or services
Purchase Order Financing
Short term financing method to allow a corporation to purchase raw materials or finished goods quickly
Rapid Sales Growth
Surging sales growth outpaces available working capital and credit
Capital Constraints
Lack of working capital making it difficult in funding inventory production to fulfill contracts and purchase orders
Sales Volatility
Unforeseen or large sales opportunities develop quickly and exceed available working capital