Purchase Order Financing
Keep Sales Moving with PO Financing from Gateway Trade Funding.
Purchase Order financing from Gateway Trade Funding allows your business to purchase inventory from your vendors without drawing on your line of credit.
Gateway provides letters of credit, payments against documents or wires to foreign or domestic manufacturers to cover the cost of pre-sold inventory. Before the product ships, Gateway arranges for the inspection of finished products anywhere in the world.
What is Purchase Order Financing?
Purchase Order financing is quick, short-term financing used to fund goods supplied by a third-party manufacturer or distributor to fulfill confirmed purchase orders from a company’s customers. It is often used by companies that don’t have enough cash flow to purchase inventory to complete new or large orders they want to take on to grow.
PO Finance companies help businesses by paying their suppliers directly, in most cases via a bank-issued letter of credit to ensure the goods needed to fill the order are received in a timely manner. In most cases, an accounts receivable lender will advance proceeds once the customer is invoiced and pay the purchase order finance company directly.
How PO Financing Works:
Customer
Issues Purchase Order to Client.
Client
Orders product from Supplier and makes a purchase order request to Gateway, which is then confirmed.
Supplier
Produces products ready to ship once inspection is completed.
Supplier
Ships product and draws on the Letter of Credit, wire or payment against documents.
Gateway
Is repaid from Accounts Receivable proceeds.
Advantages of Purchase Order Funding from Gateway Trade Funding Include:
- Supplements existing capital sources.
- Up to 100% financing for pre-sold inventory, including freight and duty.
- Off-balance sheet financing, replacing equity investment, and extending your working capital.
- Purchase inventory without drawing on your line of credit.
- Inspection of finished goods anywhere in the world.
- Letters of Credit are issued quickly, without reducing your bank line of credit.
- Unlike banks, other factors, or asset-based lenders, Gateway is repaid directly from the supplier’s accounts receivable.
- Every financing option is expertly customized for you.
- Quick response and fast action.
Who Can Benefit from Purchase Order Funding?
- Startups.
- Companies growing more quickly than their available credit.
- Companies in turnaround mode.
- Companies in bankruptcy or being reorganized.
What Can Be Financed?
Pre-sold finished goods
- Shipped directly to the client’s customer.
- Shipped to a third-party warehouse.
- For certain transactions, shipped to a client’s warehouse.
Production finance/work-in-process
- With acceptable supplier agreement regarding terms of payment.
- With acceptable collateral from client/principals.
Client Profiles
Companies that benefit from Gateway’s PO Financing Program Include:
- Importers
- Wholesalers
- Distributors
- Manufacturers
- Others
Typically, we will finance $100,000 up to $10,000,000 in working capital.
A partial list of the types of companies we have provided purchase order financing to includes:
Alcoholic Beverages
Apparel
Automotive
Baby Accessories
Beer
Clothing
Commercial Lighting
Commercial Refrigeration
Computer Hardware and Software
Construction
Emergency Preparedness
Food
Footwear
Government Procurement
Home Furnishings
Home Improvement and Hardware
Industrial Fabrics
Industrial Machinery
LED Products
Office Furniture
Pet Food and Products
Promotional Products
Recreational Products
School Supplies
Seasonal Gifts
Sporting Goods
Steel
Technology
Toys
Women’s Accessories
Women’s Handbags
Recent Purchase Order Financing Examples from Gateway Trade Funding
$2M PO Financing Facility
for an importer of PPE products selling to US states, municipalities, corporations, and the federal government.
$500K PO Financing Facility
for a US importer of automotive parts selling to US OEMs.
$1M PO Financing Facility
$500K PO Financing Facility
to a US importer of cosmetic and beauty products to US subscription box companies.