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Purchase order financing and PO funding is a short term cash flow and working capital business finance program provided by Capital Funding Solutions




 


Purchase Order Funding and PO Financing


  Has your company received a large purchase order?


  Are you concerned about a large order that you cannot fulfill, due to inadequate financial resources?

Purchase Order financing may be a solution.  It is short term funding used to finance the purchase or manufacture of specific goods that have been pre-sold by you to a creditworthy end customer.

The cash advanced under PO funding is used to pay for the upfront materials and labor necessary to fulfill the order from a quality customer.  Once you produce, ship, and send an invoice for the goods - the PO financing will be closed through a Factoring transaction and continues as a normal A/R factoring program. 


It allows clients to accomplish the following


 


Secure payment to a 3rd party supplier for finished goods that
will be shipped directly to the end customer.


 


To pay job-specific suppliers for raw materials


 


To pay job-specfic labor


 


To pay for packaging, shipping costs, duties and inspections


Basic criteria for qualifying
  Client's business strength and performance
  Business's ability to satisfy the PO in less than 30 days
  Profit margins high enough to absorb the funding costs
  Size of reoccurring purchase order (minimum of $50,000)
  Number and quality of suppliers
  Existing or proposed factoring relationship 

Supplier Guarantee Funding: An alternative to Purchase Order Financing (PO Funding) that offers more flexibility and less expensive funding to businesses.

Alternatives to Purchase Order funding (advancing cash to suppliers) may be the use of Letters of Credit or Payment Assurance Letters. The letters insure your vendors that they will be paid on time, and how they will be paid.  When vendor's minds are at ease, they often eliminate pre-payment and C.O.D. requirements and extend payment terms.

The advance amounts and fees vary depending on each situation. Typically, every transaction will stand on its own, based on business history, credit worthiness, the ability of the supplier to provide the goods or services.





Factoring Informational News Articles
Selecting an Invoice Factoring Company: Best Practices, Part I
Selecting an Invoice Factoring Company: Best Practices, Part II
Selecting an Invoice Factoring Company: Best Practices, Part III
 


Cash flow funding and working capital financing programs are offered to small and medium businesses in Clearwater Orlando Miami Ft. Lauderdale Tampa and St. Petersburg Florida
www.finance-factoring.com


Capital Funding Solutions



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