What Is Purchase Order Funding?

Purchase Orders are formal agreements that a product is going to be bought at a specific price.

Purchase Order Funding is short term financing that provides the ability to acquire material for creditworthy customers. When reselling or distributing a finished product either funds or credit lines can be provided.

How Are Purchase Orders Created?

Purchase Orders are submitted by a buyer to the provider of a product. This is a promise to purchase goods rather than an invoice for goods already delivered. In some cases, cash is needed to allow the business to receive raw materials they need to fill the order and deliver the goods requested in the purchase order.

Who Can Benefit from the Funding of Purchase Orders?
The receiver of the purchase order can sell their respective income stream. The proceeds from this can then be used for equipment purchases, raw materials, or other business expansion and expenses.

Benefits from Funding Purchase Orders
- When suppliers require payment in advance
- Banks unwilling to fund these advance payments
- Larger purchase orders that could disrupt your cash flow