Purchase Order Finance
Purchase Order Finance is a great option for any business looking to fund pre-sold finished goods . If you win an order from a customer and need to pay suppliers upfront, but don’t want to tie up working capital, Purchase Order Finance may be the ideal solution.
The funder simply pays suppliers for raw materials or finished goods that are pre-sold to credit-worthy customers. The funder can offer Letter of Credit facilities, or make direct payments to overseas or domestic suppliers. Many Importers use this funding to complement existing Import Finance facilities. Purchase Order Finance usually works hand-in-hand with Invoice Finance.
This flexible finance is ideal for young, growing companies with confirmed orders, who might struggle to get bank support. It’s also perfect for businesses that have reached their limit with the bank, but want additional funding .
What are the benefits?
- No impact on existing funding. This flexible funding can sit alongside your existing facilities.
- Transaction-based. The focus is on the transaction, rather than the balance sheet.
- Flexible. You can use the facility as you need it, so it’s great for one-off deals and seasonal business.
- Purchasing Power. You have the ability to fund orders that you otherwise might have to turn away.
- No equity dilution. You can fund opportunity purchases without diluting equity.
- Funds expansion. You have confidence to tender for new business, knowing you can fund it.
How much does Purchase Order Finance cost?
The cost varies, depending on the length of the transaction cycle, and the product and provider you choose. We can talk you through all of your options and explain the pricing in more detail to you.
What’s the next step?
This specialist product is offered by a handful of niche providers. Clancy Business Finance have an in-depth understanding of this product, and we have vast experience working closely with the specialist funders. When you call Clancy Business Finance, we’ll assess your specific needs and identify which lender and product is best for your business. We’ll structure a funding solution that meets your exact requirements. Working with you, we’ll ensure that you get the best deal with the most suitable funding partner.