PO Financing

Advantage of Leasing, Sunset Financial Group

Purchase Order Financing
As a distributor, trader or wholesaler of goods and/or services, one of your company’s primary goals is seeking out and securing reputable clients to engage. Like any business, it is vital to ensure your clients that your small to medium-sized business is capable in successfully processing and delivering orders efficiently. However, sometimes small and medium-sized businesses do not have the financial resources necessary in executing larger orders – a reality that does not bode well for businesses interested in retaining their clients and preserving their reputation.

Nevertheless, there is a simple solution that doesn’t require you to get mixed up with banks or business loans. Purchase Order Financing (PO financing) is a short-term commercial financing option that furnishes your business with the necessary capital needed to pay suppliers upfront without depleting your company’s cash reserves. This provides your company with the financing necessary to buy goods and/or services from your suppliers and successfully deliver them.

You can even use purchase order financing if your company has less-than-perfect credit or no credit at all. By using your purchase order from a reputable client or government as collateral, PO financing presents your business with the opportunity to work past its current financial limitations.

How Does It Work?

A standard PO financing transaction normally has six steps:
  1. Acquiring a purchase order from your client.
  2. The factoring company pays your suppliers via a bank wire or letter of credit.
  3. The order is delivered to your client, who accepts it.
  4. You invoice your client.
  5. Your client pays the invoice, concluding the order.
  6. The transaction is settled.
While purchase order financing is a valuable resource for a variety of small and medium-sized businesses, several specific criteria must be met in order to qualify for PO financing. Given the associated risks, Sunset Financial, LLC will only finance transactions that:

 

  • Sell finished or unfinished (i.e.: raw materials) goods and/or services from a third party.
  • Sell goods and/or services to reputable clients and/or government entity.
  • Have profit margins of 25% or more.

If your company meets these requirements, it is likely that you will be able to qualify for PO financing. An additional benefit of PO financing is that it is incredibly simple process that is relatively easy to obtain and can be set-up within 1-2 weeks. The entire process is typically completed and repaid in less than two months.

If your business has landed a lucrative order but lacks the funds to fulfill it, you should consider PO financing. If you would like to see if you qualify for purchase order financing, please contact us at info@sunsetfg.com.
 

Contact Us

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Sunset Financial Group, LLC

5250 W. Century Blvd.

Suite 501
Los Angeles, CA 90045

 

(310) 636-1133