P. O. FUNDING
The Problem With Purchase Orders
When a customer has agreed to buy a certain quantity of something from a supplier at a certain price point, they usually send over what’s called a Purchase Order. If you’re a small business owner and you receive a Purchase Order and agree to the terms on it, that purchase order document becomes a legally binding contract between the two parties: you and the buyer.
Sellers send out invoices to their customers, and buyers send out Purchase Orders to their suppliers.
While it’s great news when your small business gets a large Purchase Order, not every new company has the liquid cash needed to fill every order—particularly when multiple orders are on the table. As every small business owner knows, cash shortages practically come with the territory. In fact, over 60% of small business owners worry about cash flow problems every month.
The last thing any business owner wants to do is turn away a large purchase order because their company’s cash is tied up. Instead of missing out on the potential to generate a ton of revenue or worrying about what being unable to fulfill a Purchase Order might mean for their business’ reputation, many suppliers that find themselves lacking the cash they need to ship goods are turning to Purchase Order financing solutions.
THE SOLUTION !!
PURCHASE ORDER FINANCING
Unlike factoring, which expedites the cash from your invoices, Purchase Order Financing gives you the ability to have goods available for your clients from your sources before generating an invoice.
If you’re a product importer, jobber, reseller, or distributor, and need capital to fulfill a large Purchase Order, PO Funding is a solution to fuel your business, give your requests, and grow your business.
What is Purchase Order Financing?
What are the Benefits of Purchase Order Financing?
- P.O. Financing is not a loan
- P.O. Financing pays your suppliers or gives them payment or Vendor Guarantees
- You can take on bigger orders with P.O. Financing
- P.O. Financing includes A/R Management
- You can leverage our fulfillment and logistics expertise
- Credit protection against bankruptcy through Non-Recourse Factoring
United Fundings Merchant Cash Advance
Flexible Loans from $5,000 to $1,000,000
Who are the Target Clients for
- Startups, Turnarounds, Bank Exiting, and Non or Under-Bankable Relationships
- Fast Growing Client with sales of $30,000-$10,000,000 per month
- Any industry that buys and sells goods in the same physical shape to B2B or B2G customers
Documents Required for Most
- The Purchase Order from your customers
- Your supplier’s Invoice to you
- Your Invoice to your customer
- Your Purchase Order to your supplier
- Business information:
- Legal information (e.g., any pending lawsuits?)
- Financial statements (e.g., P&L statements and balance sheet)
- Tax filings
Common Business Traits for
Different Businesses have different criteria for approval. On average, however, companies that qualify for UF Purchase Order Financing usually tend to have the following traits in common:
- The Company (Borrower) doesn’t make the products it sells. Instead, it just resells products from the supplier, adding their own packaging and labeling.
- The price of the sale typically needs to be at least $50,000.
- The gross margin on the transaction needs to be at least 20%, if not more.
- The Customer (Buyer) involved in the deal needs to be creditworthy. UF will conduct a detailed credit check on your customers to determine their creditworthiness. Sometimes we will do a business credit check on your customers. Others times it is not necessary, but we will still look for things such as whether the customer has a record of timely payments, bankruptcies, or litigation.
- The supplier needs be reputable with a track record of delivering orders on time, made to customer specifications.
- The transaction needs to be non-cancelable.
- The borrower needs to have a good reputation and be in good financial standing.
Assuming your small business meets the above criteria, you may find that Purchase Order Financing is just what you need to get to the next level.