Cash flow hiccups shouldn’t stop your business from seizing big opportunities. That’s why purchase order financing is becoming a go-to solution for companies that need funds to fulfill orders. But how does PO financing work? Let’s walk through the process step by step so you can see how Factoring Express LLC can help you turn a purchase order into profit.
Below, we also discuss a quick example of how PO financing can be the golden ticket to scaling your business. Keep reading to learn more insights about this popular financing option!
Step 1: You Receive a Purchase Order
It all starts with a purchase order from a creditworthy customer. This could be a retailer, distributor, or any buyer with a solid payment history.
For example, let’s say a hardware store chain orders $100,000 in tools from your wholesale business. The order is confirmed, but your supplier needs $60,000 upfront to deliver the goods.
However, you don’t have the funds to pay $60,000 upfront, potentially delaying or canceling the big order. Instead of dipping into your savings or taking out a loan, you can fund the supplier cost through PO financing.
Step 2: Apply for PO Financing
Next, you reach out to a PO financing provider like Factoring Express LLC. You’ll submit the purchase order, details about your customer, and info about your supplier.
We’ll evaluate the order—focusing on your customer’s ability to pay—rather than your credit score. Startups, small businesses, and companies with tight cash flow can qualify for PO financing as long as they have creditworthy customers.
Approval can happen in as little as 24-48 hours for our purchase order financing. Our specialist will guide you on the process, ensuring your purchase order gets funded as soon as possible.
Step 3: Your Supplier Gets Paid
Once approved, Factoring Express LLC pays your supplier directly—$60,000 for example. Your supplier will receive the funds immediately via ACH or check.
Upon receiving the funds, your supplier then produces and ships the goods to your customer. This prevents delays and ensure you deliver on your promise for every big order. Above all, you don’t have to worry about scraping cash together as factors can even assist with the costs of shipping.
Step 4: Your Customer Pays, and the Financing is Settled
After 30-45 days, your customer pays the invoice—say, $100,000—directly to the financing provider. Factoring Express LLC takes back the $60,000 advanced, plus a fee for the service, and you pocket the remaining $40,000 as profit. It’s that straightforward!
Simply repeat the process for every big order you don’t have enough funds. No more saying ‘no’ to larger contracts and you’ll have the confidence to compete against bigger players in your industry.
A Real-World Scenario
At Factoring Express LLC, we’ve seen many businesses thrive with PO financing. Through our funding, numerous companies in industries, such as retail, wholesale, and manufacturing, manage to take home huge profits.
Picture this: A small electronics manufacturer lands a $75,000 order from a national chain. The supplier needs $45,000 upfront, but the manufacturer only has $10,000 in cash.
With PO financing from Factoring Express LLC, the supplier is paid, the order is delivered, and the manufacturer nets a tidy profit after the chain settles the invoice.
Without PO financing, that order might’ve slipped away. And without financing, you may face the ire of customers when delivery gets delayed. But with the help of factors like us, you’ll secure funding for every eligible order, so you can fulfil them as promised.
Why PO financing works
You know the beauty of the PO financing process? It’s fast, doesn’t require collateral, and hinges on your customer’s credit—not yours. Whether you own a startup still building a credit history or a company recovering from mounting debt, PO financing delivers much-needed capital your supplier needs to fulfill orders.
Purchase order financing also gives businesses the chance to scale. By keeping their cash flow available for new opportunities while still fulfilling huge orders, PO financing makes it easier for companies to grow without depleting their capital.
Not only does it help businesses financially, PO financing also promotes better supplier relationship. When suppliers don’t need to chase down payments, they willing to offer discounts or better terms for future orders.
On top of that, you don’t have to chase payments yourself from the customer. Factors – like Factoring Express LLC – handles everything, from funding to collections.
Want the basics again? Revisit our blog “What is Purchase Order Financing?” (#) for a detailed look on how this financing works. You can also keep reading our next post, “PO Financing vs. Traditional Loans” (#), to see how it stacks up against other options.
If that’s not enough, you can always reach out to us and our specialists will be happy to discuss PO financing with you!
Get Started Today
Ready to streamline your cash flow with PO financing? Factoring Express LLC makes the process seamless with quick, same-day approval! Apply for financing today and enjoy a 1-week free trial on select accounts to experience convenient funding on us!
Factoring Express LLC do not impose long-term contracts or monthly minimums. You’ll get instant cash advances on your purchase orders in as fast as 24 hours, so your suppliers can get to work right away.
Want to learn more about PO financing? Ready to get quick funding? Contact us to see how we can help your business thrive!
