Distribution · Purchase order financing
Purchase order financing for distributors
A large order from a retailer or government buyer can be too big to fill with the cash on hand. Purchase order financing pays your supplier so you can deliver, then is repaid when the customer pays.
What to know
What distributors should know about PO financing.
It is tied to a confirmed order.
Providers fund against a specific purchase order from a creditworthy customer, so a signed order and a reliable supplier are the foundation.
Margins need to cover the cost.
PO financing typically costs more than other options, so it generally suits orders with healthy gross margins.
Supplier reliability is underwritten too.
Providers look at whether your supplier can deliver on time and to spec, since a failed shipment undermines repayment.
It often leads into factoring.
Once goods are delivered and invoiced, many distributors move the receivable into factoring so the PO financier is repaid quickly.
FAQ
Common questions from distributors.
What is the difference between PO financing and invoice factoring?
PO financing funds the supplier before the goods are delivered. Invoice factoring advances cash after delivery, once an invoice has been issued.
Who qualifies for purchase order financing?
Businesses with a confirmed order from a creditworthy customer and a reliable supplier, typically with strong enough margins to cover the fees.
Can PO financing cover the full cost of an order?
Often a large portion, sometimes close to the full supplier cost, but limits vary. Providers set the amount based on the order, margins and supplier.
Is Truidian a lender or factoring company?
No. Truidian is a business solutions company. It helps businesses identify and connect with participating third-party providers, who make every approval, pricing and terms decision.
Tell us about your distribution business.
Share a few details and we'll identify participating providers whose programs may fit.
Truidian is a business solutions company, not a lender, factoring company or payment processor. Financing and services are offered by participating third-party providers and are subject to their approval and terms. Approval, funding, rates and terms are not guaranteed.