Paramount Capital Enterprises, we assist individuals and businesses through their cash flow challenges without increasing debt.

How Does Purchase Order Financing Work?

When a business finds itself in the position of not being able to promptly fill a customer's purchase orders, it can be in real danger of losing those orders and the potential profit they represent. Worse yet is the potential loss of any future orders from that customer.

We recommend that such businesses examine the possibility of factoring their accounts receivable first as that can often give the needed cash to meet these needs and is also somewhat less costly. However when this avenue is not available,  Purchase Order financing can be the answer.

What is Purchase Order Funding?

Where the purchase order is noncancelable and from a strong creditworthy customer, our funding source will advance the actual funds necessary to fill the order. Usually this will entail either direct payments made by the funding source to third party suppliers or the posting of Letters of Credit by the funding source on behalf of its client.

Purchase Order Financing is available to virtually all industry segments, with the explicit exception of construction.

In practice as soon as the purchase order is filled and an invoice can be generated, then the funding source will factor that invoice and use the initial payment to retire the purchase order advance and fee, with the overage going to the client. Obviously the second payment on the factoring will make up the balance of the profit for the purchase order financing client.

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.

Factoring Application  Please fill out the pre-qualification application and we will contact you right away.

Have you received purchase orders lately? Do you need money before you can fill the orders? Contact us and let us explain how we can help.