What is Purchase Order Financing?
Purchase order financing (PO financing) is a funding option used by businesses and entrepreneurs to fulfill one or more customer orders. It's not uncommon for business owners to accept orders on products or services that they are unable to fulfill monetarily. Assuming the business owner seeks funding for such orders, they can still honor the customer's order. This is where a purchase order financing company comes into play: this funding is intended specifically for the fulfillment of purchase orders, hence the name.
Purchase Order Funding is Ideal For:
- Companies Seeking Growth Opportunities
- Fulfilling Large Orders/Major Projects
- Navigating Cash Flow Issues
- Companies with Less than Perfect Credit
- When Banks Say No
Connecting our clients with billions of dollars of private capital resources, over the years, is not something that happened by chance. Rather, it is the result of the combination of carefully-considered and well-written business planning documentation, well-motivated clients, and our meaningful relationships with private investment sources. Let Intrepid Private Capital Group help to connect you with the purchase order financing that you need.
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Frequently Asked Questions About Purchase Order Financing
Benefits of Purchase Order Financing
There are several benefits associated with purchase order funding, one of which is the simple fact that it allows businesses to continue selling their products or services, even if they experience cash flow problems.
When a business is forced to turn away customers because of insufficient cash flow, it can leave a lingering mark that discourages other prospects from buying their products or services. Using purchase order funding, however, business owners can keep their doors open for business.
While there are always exceptions, it's generally easier to qualify for PO financing as opposed to a traditional small business bank loan. Whether your business has no credit or poor credit, chances are you can find PO financing options available. This makes it a particularly attractive choice for aspiring business owners and entrepreneurs.
How to Apply for Purchase Order Financing?
For more information on obtaining purchase order financing or any questions regarding our business funding process, feel free to Contact Us
. To begin a funding application, simply follow the "Apply Now
" link to get started. Let Intrepid Private Capital Group be your partner in making the right decisions and help you get the funding that you need for your business or project.
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Disadvantages of Purchase Order Financing
Of course, there are also some potential drawbacks to purchase order financing, including the rarity of this funding option. It's becoming harder and harder for business owners to find PO financing.
Furthermore, purchase order funding is often time-sensitive. A typical PO financing loan has multiple stages through which it is funded. The business owner must abide by this time line, repaying the lender according to schedule. There's very little flexibility associated with purchase order financing.
Purchase Order Financing vs. Accounts Receivable Financing: What's the Difference?
With accounts receivable financing, the business owners will sell outstanding invoices or receivables at a discounted price. With purchase order financing, the business owner borrows capital to cover the expense of one or more purchase orders. While purchase order financing rates and terms vary, you can typically expect to incur a 1-5% interest rate on accounts receivable financing, whereas a typical PO financing loan carries an average interest rate of 5-10%.
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