Your customer's invoice is overdue, and you're still waiting on the payment. But, your supplier is waiting for payment, and you can't risk paying late or ruining your relationship. Regardless, your packaging, shipping, product and labor costs must be met.
Does this situation sound familiar?
Purchase order financing allows you to get the cash you need to make these payments, without taking away from your working capital. This allows you to fulfill your commitment to your customer, while preserving your standing as a trusted business owner.
In order to take advantage of purchase order funding (also called invoice factoring), you first need to present proof of the delivery and acceptance of the goods, while invoicing your financier for the goods at an agreed-upon discount. Then, the lender invoices your buyer for the full amount, collecting the payment according to your agreed upon terms. After receiving the payment, the balance is paid (less applicable administration fees and the cost of money used). The process for non-finished goods differs slightly, as it involves the seller taking possession of the goods in an unfinished state.
Purchase order funding is the ideal funding option for businesses that require the cash flow to fill orders, while avoiding a tarnished reputation in the process. It's also easier than bank financing, as it hinges on the creditworthiness and financial strength of the invoiced company, rather than your own.
The Purchase Order Financing process has never been so fast, simple and easy! All you need to do is sell your customer's purchase order in exchange for the capital you need.