PO financing for your first big order

A confirmed purchase order from a strong customer should be the best day of your year. If you cannot afford to produce it, it becomes a problem instead. This is the program built for exactly that moment.

The short answer

Purchase order financing pays your suppliers so you can produce a confirmed order you cannot self-finance. The funder covers up to 100% of supplier cost, gets repaid when your customer pays the invoice, and you keep the margin minus fees. Directional cost runs about 2-6% per 30 days, and a deal typically funds in 2-4 weeks. Underwriting leans on your customer's credit and the strength of the order, not your years in business.

The problem a big PO creates

A $400,000 order from a national retailer sounds like a win until you price it out. Material is $160,000 due before production. Labor and machine time run through the build. The retailer pays net 60 after delivery. You are looking at 4 months of cash out the door before a dollar comes back, and your operating account cannot carry it.

Shops handle this 3 ways: decline the order, drain the operating account and hope nothing else goes wrong, or bring in a funder whose money is made for exactly this gap. The third option is PO financing.

How PO financing works, step by step

You receive a confirmed PO from a creditworthy business or government buyer.
The funder verifies the order and your supplier quotes, then agrees to fund the production cost.
The funder pays your suppliers directly, usually by letter of credit or direct payment, so material ships.
You produce and deliver. The customer receives the goods and you issue the invoice.
The customer pays the funder on the invoice terms. Many deals pair with factoring here so the invoice converts to cash immediately instead of waiting net 60.
You receive the margin minus the funder's fees.

What it costs

Directional range: about 2-6% per 30 days the funding is outstanding, priced per transaction rather than as an annual rate. On a $160,000 supplier cost outstanding for 60 days, that is roughly $6,400-$19,200. Your actual offer depends on the customer's credit, the supplier relationship, the order margin, and production time.

The math that matters is the margin on the order. If the PO carries a 35% gross margin, giving up a few points to a funder still leaves you with a profitable order you could not have taken at all.

Who qualifies

B2B or B2G manufacturers with a confirmed, non-cancellable PO from a creditworthy buyer.
Enough gross margin on the order to cover funding cost and still profit, typically 20%+.
Verifiable suppliers with real quotes the funder can pay directly.
Newer shops can qualify: the customer's credit carries the file, not your history.

PO financing vs. factoring

They sit at different points in the same cash cycle. PO financing funds production before delivery, when there is no invoice yet. Invoice factoring funds after delivery, when the invoice exists. Many manufacturers use both on the same order: PO financing to produce it, factoring to convert the invoice to cash the day it issues.

Read the full breakdown on our purchase order financing page, or see how the placement process works.

Manufactor Finance is a US independent commercial finance broker. We are not a bank, lender, or funder. Cost and timing ranges above are directional, not quotes, and every offer is set by the funding institution after underwriting.

PO financing FAQs

Purchase order financing is funding that pays your suppliers so you can produce a confirmed customer order. The funder pays for materials and sometimes production costs, the customer pays the funder when the order is delivered and invoiced, and you receive the margin minus fees.

Directionally, about 2-6% per 30 days the funding is outstanding. Your actual offer depends on the customer's credit, the supplier, the margin on the order, and how long production takes. It is priced per transaction, not as an annual rate.

Often yes. PO financing underwrites the strength of the order and the creditworthiness of your customer more than your time in business, which makes it 1 of the most accessible programs for younger shops with a real PO from a strong buyer.

It depends on the funder and the deal structure. Most PO funders pay suppliers directly for materials. Some will cover a portion of production costs when the order is large enough and the margin supports it. This is negotiated per transaction.

No. We are a US independent commercial finance broker, not a bank, lender, or funder. We match your file with the funding institution that fits, and you sign directly with that institution.

Free PDF

Funding Requirements Checklist for US manufacturers

See exactly what underwriters actually look at — for factoring, PO financing, equipment, working capital, ABL, and SBA — before you fill out a single application.

What documents you need for each program
Typical time-to-fund by program
Common disqualifiers worth knowing up front
How Manufactor Finance is compensated — $0 fees to you

3-page PDF · No application, origination, or closing fees to you · We're a independent broker, not a bank.

See the full requirements breakdown

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