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Purchase Order Financing FAQ
Q: Are there minimums for PO Financing?
A: Yes. Finished goods must have a 20% markup. This is to insure that you receive enough profit to make the transaction worthwhile.
If you have a special situation where the markup is less, we suggest you contact us directly to discuss it and see if it is workable.
Q: What is the cost for PO Financing?
A: The cost of PO Financing is dependent on the period of time between financing and when customer pays the invoice. In general, expect to pay 3 to 5% for 30 days (financing to invoicing) on the PO Financing and the same rate for A/R Financing (invoicing to customer payment).
Q: Will PO Financing work for all types of companies?
A: It works best for importers or distributors.
PO Financing may or may not be suitable for manufacturers. We suggest you contact us directly to discuss your situation and see if there are other options.
Q: My company sells raw materials to manufacturers. Can PO Financing work for me?
A: PO Financing is generally for finished goods. We suggest you contact us directly to discuss your situation and see if there are other options.
Q: My company provides a service. We have several PO’s from large companies. Can I do PO Financing?
A: PO Financing is generally for finished goods. We suggest you contact us directly to discuss your situation and see if there are other options.
Q: I am a manufacturer. Can I benefit from PO Financing?
A: PO Financing works best for finished goods you purchase from a supplier. Manufacturers should contact us for further discussion on your situation.
Q: I import goods in bulk and re-package them before shipping to my customer. Will PO Financing work for me?
A: Yes, if work is done by a third party. If it is done in house, then contact us directly to discuss the situation and other options.
Q: I have PO’s, but my supplier wants me to pay via bank wire at time of order. Can you help me?
A: The lender will negotiate payment terms with your supplier and see that the order is shipped quickly.
Q: My customer is overseas and he will pay with a documentary L/C, but I still need to pay for the goods before I ship. Can PO Financing help?
A: Please contact us directly as we need to review the transaction thoroughly and determine the options.
Q: If we use PO Financing, do we need A/R Financing?
A: It is common to do PO Financing to get the order shipped. Once customer is invoiced, A/R Financing will advance funds until it is paid.