Purchase Order Financing

Purchase Order Financing can be best utilized in second stage companies and high growth situations. Those types of companies are bringing new products to market or expanding their markets with limited working capital but have verifiable purchase orders. The Purchase Order lender provides the upfront capital for the inventory and when the order is shipped, the lender is paid back through a factor, accounts receivable lender or collection of the receivable. Ideally, Purchase Order Financing works best when the inventory requires little or no fabrication. The best scenario is where the inventory is dropped shipped from the supplier to your customer and the receivable is generated.