Purchase order financing is a short-term commercial finance option that provides capital to pay suppliers upfront for verified purchase orders. Businesses avoid depleting cash reserves or declining an order because of cash flow challenges. It allows companies to accept unusually large orders and adjust the loan basis up/down quickly to meet needs. If order volume drops, there’s no long-term commitment so they can stop using it at any time.
PO financing is designed for growing businesses that want to fulfill large orders. They have little access to working capital and/or poor cash flow. The types of businesses that usually qualify include: