Purchase Order Financing
Purchase Order (PO) Financing is a form of commercial funding that enables businesses to secure capital for a pre-arranged project by using the client's purchase order as collateral.
In many instances, small or expanding businesses may lack the immediate funds required to procure materials for substantial projects, and obtaining credit solely based on their creditworthiness with only a purchase order can be challenging through traditional financial institutions.
The distinguishing factor between PO financing and conventional bank financing lies in the credit evaluation approach. PO financing assesses the creditworthiness of your customer, while a bank primarily scrutinizes your financial status, regardless of any purchase order indicating future income.