PO Finance: Funding Options You Might Not Know About

As a company owner, you’re probably familiar with this scenario: your company lands a large purchase order from a big box retailer and your factory is looking for a deposit. You’ll need some additional working capital to make it happen but where do you get the funds? What are your options?

What is PO Finance

Quickly defined, purchase order finance is funding primarily secured by the product purchased and the resulting receivable. PO finance differs from a traditional loan in that payments are made directly to your vendors and your buyers remit payment directly to Global Trading Partners.

What Can Purchase Order Financing Be Used For

PO finance can be used to fund the purchase of any imported or domestically produced product. It can cover manufacturing costs, freight, duty and domestic drayage.Here’s an example. Let’s say your purchase order is from Walmart for an art supply kit and the P.O. is for $500,000. The delivery deadline is in 60 days and you don’t have the inventory. So production is the only way to make the order happen. To have the cash available, you’ll need to borrow it. This is where purchase order financing can provide the funds you need to get the order moving, quickly!

What are the Options for PO Financing

It’s nice to have options! Especially when you’re on a deadline. Purchase order financing gives you the option to get quick cash, up to 100% of the purchase order, to meet your customer demands. You have the option to use the funds from PO financing in several ways, including:

  • Funding for deposits to manufacturers
  • Funding for the balance due at time of shipment
  • Funding for ocean freight, duty, 3PL warehouse, and domestic drayage

Purchase order financing gives some unique flexibility on how you spend the funds. If you’re a domestic manufacturer or distributor, PO financing can help you buy the products or raw materials you need to meet deadlines. Or, if your manufacturer is overseas, PO financing can help get your order placed, shipped and delivered on time.

If you’re still considering if purchase order financing is the right option for you, just remember that it can get you quick funding when you need it. And since it’s not a traditional loan, you won’t be required to go through all the paperwork, red tape or lengthy waiting periods to get approval. Purchase order financing cuts out all those processes and can get you approved in just a matter of days. Plus, you get some pretty great, value-added benefits such as assistance working with overseas manufacturers, completing customs paperwork, and dealing with government agencies.

Global Trading Partners has the PO Funding options that are right for your business. Get to know more about your options and how PO Financing can work for your business. Reach out to Global Trading Partners today.