What is purchase order (po) financing?
Purchase Order (PO) Financing: Funding to pay your suppliers so you can fulfill a confirmed customer PO you couldn't otherwise afford.
How it works
PO financing pays your suppliers directly (often via letter of credit) against a confirmed purchase order from a creditworthy buyer. Once you deliver and invoice, the transaction usually rolls into factoring to close the loop. It is not working capital for overhead—it is transaction-specific funding for a specific order.
Where you will run into it
Purchase Order (PO) Financing comes up most often in purchase order financing conversations. See how purchase order financing works, including real cost ranges and timelines.
Related terms
Purchase Order (PO) Financing questions
Funding to pay your suppliers so you can fulfill a confirmed customer PO you couldn't otherwise afford.
PO financing pays your suppliers directly (often via letter of credit) against a confirmed purchase order from a creditworthy buyer. Once you deliver and invoice, the transaction usually rolls into factoring to close the loop. It is not working capital for overhead—it is transaction-specific funding for a specific order.
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
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