A new or existing customer comes to you with a new large order. You just can’t make the numbers work to cover the cost of buying the goods from the supplier. However, saying no to this order would hurt your growth plans and you would lose out on an amazing opportunity.
What do you do?
Purchase order financing from Gateway Trade Funding can be the perfect solution. Purchase Order financing is quick, short-term financing used to fund goods supplied by a third-party manufacturer or distributor to fulfill confirmed, creditworthy purchase orders. In fact, PO Finance companies help businesses by paying the 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.
How does PO Financing work with Gateway Trade Funding?
- You receive a purchase order from your customer.
- You order the product from your supplier and make a purchase order funding request to Gateway.
- Your supplier produces the products and the products are inspected by a third-party inspection service.
- Your supplier ships the products and draws on the letter of credit. In some cases, we can arrange a sight collection or wire transfer payment with your supplier.
- Gateway is repaid from the accounts receivable proceeds. The remaining funds, your profit, are sent to you.
Advantages of PO Financing from Gateway include:
- Supplementing your existing capital sources.
- It provides up to 100% financing for pre-sold inventory.
- It is off-balance sheet financing, replacing equity investment, and extends your working capital.
- Allows you to purchase inventory without drawing on your line of credit.
- Provides inspection of finished goods around the world.
- Letters of Credit are issued quickly, without reducing your bank line of credit.
- Unlike banks, or other lenders, Gateway is repaid directly from the accounts receivable created from the product Gateway purchases.
- Every financing option is expertly customized for you.
Who Can Benefit from Purchase Order Funding?
- 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 that are shipped directly to the client’s customer, third-party warehouse and for certain transactions, shipped to a client’s warehouse.
Additionally, Production finance/work-in-process with acceptable supplier agreement regarding terms of payment and acceptable collateral from client/principals.
If you have additional questions about how purchase order funding works, or you would like to get started today, give the financial experts at Gateway Trade Funding a call at (847) 861-1720 or visit gatewaytradefunding.com.