Worldwide Capital Management purchase order financing can help you if you have purchase orders that you cannot fulfill because you lack funds. As opposed to traditional bank finance, PO financing is easy to qualify for and can be set up quickly. The main requirement is that you have an order from a credit-worthy commercial or government client.
Benefits of Purchase Order Financing
Purchase order financing is a funding option that allows you to accept purchase orders, regardless of your current capital availability. It’s an ideal tool for companies that have exhausted their available funds or bank options. PO financing enables you to finance up to 100% of your supplier costs, allowing you to deliver more and bigger orders. Furthermore, PO financing has no arbitrary limits like bank financing and is directly tied to your sales. This means that all you need to do to obtain additional financing is to obtain purchase orders from solid, commercial or government customers. PO Funding is an ideal tool for companies that sell 3rd party products such as wholesalers, distributors and re-sellers who are growing quickly.
Qualification criteria
To qualify for purchase order funding, companies must meet these criteria:
- Must be a product re-seller / distributor
- Must have commercial or government customers
- Must have a minimum of $50,000 in monthly sales
- Transactions must have a minimum gross profit of 20%
If your company sells a service or manufactures goods directly (rather than outsourcing) please use our invoice factoring services.
How does PO funding work?
Purchase order funding is simple to use. Once the account is set up , you can use it to finance all current and subsequent orders.
The process is very straightforward and works as follows:
- Your company is awarded a purchase order from a customer
- You are issued a letter of credit (or similar instrument) favoring your suppliers
- Your supplier delivers the goods
- The order is delivered and accepted
- Your company issues an invoice to your client
- Your client pays the invoice
- The transaction is settled
