Purchase order financing helps businesses that need cash to fulfill product orders by paying your supplier for the manufacturing and transportation of goods up front, before you receive payment from your customers. The funds cannot be used for anything other than the purchase of specific goods needed to fulfill your customer’s order.
In order to qualify for purchase order financing you must sell finished goods (not raw materials or product components) to B2B or B2G customers with profit margins of 15%+.
Startups can qualify, but the majority of your application depends on the creditworthiness of, and your past history with, your suppliers and customers. It can be easy to qualify for if your customer and supplier in the transaction are both well-established and reputable companies.