Business Funding

Purchase Order Financing

Purchase Order (PO) Financing pays your suppliers directly so you can fulfill large orders.

At a Glance

Funding Amount $50,000 - $2,000,000+

Term Until order is fulfilled (30-90 days)

Overview

The Angel Funding Advantage

It serves as the source of incremental capital companies need when facing cash flow challenges created by a lack of working capital, supplier credit, or access to more traditional bank financing.

Instead of underwriting based strictly on your company's historical cash flow or your personal credit score, PO Financing relies heavily on the creditworthiness of your end customer and the reliability of your supplier. It is an incredibly powerful, non-dilutive tool that allows you to accept orders of virtually any size — an alternative to raising permanent equity capital that keeps you in control.

Does not require strong business credit
Grows with your sales
Non-dilutive capital

The Process

How It Works

A streamlined, transparent process designed to get capital into your hands.

The Order

You receive a verified, non-cancelable purchase order from a creditworthy B2B or B2G customer.

Supplier Payment

The PO Financing company issues a Letter of Credit or pays your supplier directly so they can begin production/shipping.

Delivery

The supplier manufactures and ships the finished goods directly to your customer.

Invoice & Repayment

You invoice the customer. The customer pays the financier directly. The financier deducts their fee and the supplier cost, sending you the remaining profit.

Who Qualifies?

B2B or B2G product-based businesses: importers, exporters, distributors, resellers, wholesalers, and manufacturers
Startups with experienced management, undercapitalized or cash-flow-constrained companies
Businesses lacking supplier credit, undergoing recapitalization, or executing a turnaround or restructuring
Non-cancelable purchase orders from established, creditworthy customers
Reliable, proven suppliers with a track record of delivering on time

Why Choose This Option

Increases your capacity to finance large orders resulting from growth and seasonality.
Offers an alternative to raising permanent equity capital — keeps equity in your hands.
Instills confidence to focus on growing sales, knowing you have the capital to fulfill them.
Builds credit and enhances price and terms negotiations with your suppliers.

Common Scenarios

How businesses use Purchase Order Financing

Massive Retail Rollout

A small apparel brand receives an order from Target to stock 500 stores and needs capital to manufacture the garments.

Government Contracts

A distributor wins a federal contract for IT hardware but must pay the OEM upfront.

Seasonal Spikes

Fulfilling Q4 holiday orders that exceed the company's normal operating cash capacity.

FAQ

Frequently Asked Questions

Get the facts on Purchase Order Financing.

Do I ever touch the money?

No. The financing company pays your supplier directly (or issues a Letter of Credit). When your customer pays, the financier takes their portion and sends you your profit.

Does this work for service businesses?

No. Purchase Order financing is strictly for physical goods and finished products.

What happens if the supplier messes up?

This is the biggest risk in PO financing. You must use established, reliable suppliers, as the financier will vet the supplier's ability to deliver before approving the facility.

Can I use this if I manufacture the goods myself?

If you assemble raw materials, you can sometimes use PO financing to buy the raw materials. However, traditional PO financing is easiest when you are using a third-party manufacturer or distributor.

How is the fee calculated?

Fees are based on the size of the purchase order and how long the facility is outstanding until your customer pays. Every transaction is priced individually — contact us for a quote tailored to your order.

Does my customer know about the financing?

Yes, they will be notified to redirect their final invoice payment to a lockbox controlled by the financing company.