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Gateway provides purchase order funding and export financing that will keep your sales moving.

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You have just started a new business, and a new potential client is interested in placing an order. Unfortunately, you don’t have the inventory to fill the order or the working capital to purchase finished products from your suppliers. This new opportunity could be the perfect opportunity to grow your new business; what can you do?

Fortunately for your new growing business, purchase order financing can help startups get the working capital they need to purchase inventory to fulfill customer purchase orders.

What is purchase order financing?

Purchase order financing is quick, short-term financing. It helps businesses purchase goods supplied by a third-party manufacturer or distributor to fulfill confirmed purchase orders.

Additionally, it assists companies, such as startups, that don’t have enough cash flow to purchase inventory for new or large orders. These orders are often ones that will help the company grow.

PO financing pays your suppliers directly. Often via a bank-issued letter of credit to ensure the goods needed to fill the order are received on time.

8 reasons PO financing is good for startups

  1. You don’t need a high credit score or long credit history to qualify.
  2. It supplements existing capital sources. 
  3. PO Finance extends your working capital without the need to add expensive additional equity investment.
  4. You can get up to 100% financing for pre-sold inventory and in some cases freight and duty.
  5. Letters of Credit are issued quickly without reducing your bank line of credit. 
  6. It allows you to purchase inventory without drawing on your line of credit. 
  7. Before the product ships, the purchase order finance company will arrange for the inspection of the finished products anywhere in the world. 
  8. You can use it along with other financing, such as accounts receivable financing, ABL financing, and stretch financing. 

How does purchase order finance work with Gateway Trade Funding?

1: You receive a purchase order from your customer.
2: You place an order with your supplier and make a purchase order funding request to Gateway.
3: Your supplier produces the products.
4: A third-party inspection service inspects the products.
5: Your supplier ships the products and draws on the letter of credit against documents. In some cases, we can arrange a sight collection or wire transfer payment with your supplier.
6: Gateway is repaid from the accounts receivable proceeds. The remaining funds, your profit, are sent to you.

If you have additional questions about how purchase order funding can help your startup grow, or you would like to get started today, call the financial experts at Gateway Trade Funding at (847) 861-1720.