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PO Financing · Published on August 31, 2009 Updated on August 18, 2017

Purchase Order Financing Can Ignite Rapid Fire Growth

Rapid Fire PO Financing

Would getting a huge order from an important customer be the best thing that could happen to your business, or the worst? Turning it down for lack of adequate financial resources not only loses the order, but could lose you the customer for good. Fortunately, there’s a way to overcome that lack of finances and set your company up for rapid fire growth – purchase order financing.

Purchase order financing (or PO Financing) comes into play when traditional bank credit is not available – your company is too new, small, under-capitalized, et cetera. It works by considering your purchase order to be collateral, and providing a letter of credit straight to your supplier. Your supplier will usually ship directly to your end customer (who must be a trustworthy, established business or government entity). When your customer makes payment, the transaction is settled and you receive the lion’s share of the proceeds.

Start-up resellers and wholesalers without a long history of profitability can use purchase order finance to fund a large order and spark significant growth. It probably won’t work for you if your profit margin is less than 15%, and it is not designed for service businesses, only hard goods.

So keep purchase order financing in mind when that huge order comes in. It might be the best thing that could happen to your business.

For further information please view our PO Finance FAQ & Purchase Order Finance Glossary .

Filed Under: PO Financing

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Our Fast-Finance Process:

  1. You get a large purchase order from your customer
  2. We verify it, and open a Letter of Credit to pay your supplier,
  3. Your supplier manufactures and ships its goods
  4. Finished goods are delivered to your customer, who remits payment to us

Testimonials:

“They provided the funds we needed for our replication business to move to the next level. I strongly recommend them to all my business associates. ”
— Brian, Bay Area

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Purchase Order Financing
203 N LaSalle #1325
Chicago, IL 60601
800-385-0660

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