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Purchase Order and
Contract Finance through
First Aarans Financial
What is Purchase Order Finance?
Purchase Order Finance or "PO Funding" can be one of the more difficult
types of commercial finance to secure for fast growing businesses.
Factors, however, routinely provide some amount of purchase order
finance as "pre-ship" invoice financing.
Traditional
purchase order finance is provided through companies that specialize in
that transaction. Our clients benefit from our established
relationships with some of the largest providers of purchase order
finance nationwide.
While requirements and
qualifications for purchase order finance will vary from lender to
lender, some are relatively standard. To qualify for purchase order
financing your business generally must:
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have an established
factoring relationship.
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not be re-packaging
or simply creating an inventory with the product.
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have an established
and acceptable credit history.
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be funding orders of
significant size ($100,000 and larger).
Purchase Orders for
services to be performed, rather than goods to be delivered, are
virtually never acceptable for typical purchase order funding. This
type of finance is considered "contract finance" and is generally
obtained through local commercial lenders such as banks or unique
providers of such services.
Purchase
Order Finance is an extremely powerful tool for importers purchasing
goods from the Europe, the Pacific Rim, and elsewhere. In some
instances, international factoring transaction can provide the necessary
financing bypassing the more complex area of purchase order finance. To
discuss the availability of purchase order finance for your particular
application, either contact an First Aarans Financial representative
directly or complete our online quick application/profile.
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Contract Finance
and
Factoring
contract Finance is
sometimes referred to as "mobilization funding". It is required when a
small or mid-size business is awarded a contract that is out of the
normal size or one that will require an unusual amount of up-front money
to purchase initial raw materials.
Contract or
"mobilization funding" requires that the borrower have an extensive
history of being able to perform against the contract. Additionally,
the borrower must generally be exceptionally creditworthy
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