Chicago Global Capital
  • Invoice Factoring
  • Asset-Based Lending
  • Purchase Order Finance
  • Merchant / ACH Cash Advance
  • Microloans
  • Invoice Factoring
  • Asset-Based Lending
  • Purchase Order Finance
  • Merchant / ACH Cash Advance
  • Microloans
 

Purchase Order Finance

For smaller contract manufacturers and especially those producing products overseas, purchase order finance can provide the capital necessary to compete with virtually any competitor regardless of size.  With purchase order finance in place, even the smallest manufacturers can effectively compete for orders placed by the largest "big box" retailers. 

As with factoring, the size of your company or its credit history is of little concern to the purchase order finance company.  NOTE:  Purchase order finance almost always involves an order for goods and not services.  An order for services usually involves contract finance and is much more difficult to obtain.

To access purchase order finance, your order must be...

Purchase order Requirements

How Purchase Order Finance Works

The most common use of modern purchase order finance is to finance the manufacture of goods for an exceptionally large domestic retail order.  A purchase order finance company will provide a bank guarantee or letter of credit (LC) to a manufacturer, oversee the actual production of goods, and finally arrange for the shipment to be delivered to your customer.  Once the goods are delivered to the customer and invoiced, a factor will often pay-off and "take-out" the purchase order finance company by financing the invoice.

Purchase order finance companies seldom provide capital for the purchase of raw materials (inventory for work in progress) to a manufacturer that is the client in the transaction. That is usually the job of an asset-based lender and inventory finance.  In most cases, they will only advance funds to a qualified "contract manufacturer" (often overseas) who can draw down on a letter of credit from a foreign bank to fulfill the order for goods.

Find Out More

Want to find out more regarding our capabilities?  Why not request a FREE and complimentary copy of our informative guide:  "When Banks Say NO!  The Small Business Guide to Factoring."  Its FREE, from the professionals at Chicago Global Capital.