What Is Purchase Order Financing?

How does Purchase Order Financing work?

  • First, your company obtains a Purchase Order from a quality company that has agreed to accept your product or service. You then send this Purchase Order to Capital Business Finance .
  • Capital Business Finance will then perform due diligence and check the creditworthiness and financial strength of our customer and any 3rd party manufacturer.
  • Once the Purchase Order is verified, Capital Business Finance will advance money to the third party manufacturer to cover the cost of goods and labor it takes to make the products for the Purchase Order. This can be one manufacturer or a combination of manufacturers, and a company that assembles the final product.
  • Once the product is completed Capital Business Finance will handle the shipping, customs clearance (if necessary) and final arrival of the product at a third party storage facility or your customer’s dock. Once the product arrives at your client’s dock, you send an invoice to your customer and Capital Business Finance .
  • The process will then shift to an Accounts Receivable relationship. Capital Business Finance will advance up to 90% of the Purchase Order invoice amount to your company.
  • Your customer pays Capital Business Finance the full amount of the invoice. Then Capital Business Finance sends the remaining balance to you, less our fee.

If any of the questions above apply to your business, give us a call or email today. We can work with you to provide a solution that solves your working capital challenges and supports your company’s current and future growth.

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