Purchase order financing: take the order you cannot self-fund.
Up to 100% of verified supplier cost, paid directly to your supplier against a confirmed PO. Underwriting leans on your buyer and the deal economics. We place the file and are paid by the funding partner only after you receive funds.
Purchase order financing, in 60 seconds
Purchase order financing funds the production side of an order you have already won. A funder pays your supplier, or the material and outside-process costs behind the build, against a confirmed purchase order from a creditworthy buyer. You produce, ship, and invoice. The invoice repays the facility, often through a paired factoring line. Directionally the cost runs 2% to 6% per 30 days outstanding, and most funders want at least 20% gross margin on the order so the financing cost still leaves you a profit.
Manufactor Finance is an independent commercial finance broker. We do not lend, bank, or invest. We match manufacturers with funding partners and are compensated by those partners only after funds are received.
How a PO facility actually runs
The funder is buying into one transaction, so every step exists to protect a clean delivery and a collectible invoice.
1. Confirmed PO in hand
A signed, non-cancellable purchase order from a commercial or government buyer. Verbal commitments and forecasts do not fund.
2. Deal review
The funder prices the transaction on buyer credit, your gross margin, supplier terms, and the production timeline.
3. Supplier paid directly
Funds go to your supplier, often by letter of credit or direct wire, for up to 100% of verified supplier cost.
4. Production and delivery
You produce and ship. The funder tracks milestones because their exit depends on a clean, undisputed delivery.
5. Invoice the buyer
The invoice created by that delivery is the repayment source, usually assigned to the funder or a paired factor.
6. Takeout and profit release
Factoring proceeds or the buyer's payment retire the PO facility. What is left, minus fees, is your margin.
Read the step-by-step mechanics, including supplier payment and takeout
What a PO deal looks like on paper
The same $500,000 order at two different cycle times. These are illustrations, not quotes.
45-day cycle, 30% margin
- PO value$500,000
- Supplier cost funded$350,000
- PO fee (3% × 1.5 periods)$15,750
- Gross margin remaining$134,250
Financing consumes about 10% of the margin on the order.
90-day cycle, 22% margin
- PO value$500,000
- Supplier cost funded$390,000
- PO fee (3% × 3 periods)$35,100
- Gross margin remaining$74,900
Financing consumes about 32% of the margin. Slow buyers and long builds, not the headline rate, are what make PO financing expensive.
Am I a fit?
10-second prequalifier
If most of these describe your shop, we can almost certainly place you into a program.
US-based manufacturer
You produce goods in the United States.
B2B or B2G customers
You invoice other businesses or government agencies — not consumers.
$25K+ in monthly revenue
Or a confirmed purchase order that gets you there.
Net-15 to net-90 terms
Your customers pay on invoice terms, not COD.
Not sure? We'll tell you honestly — no fees to you either way.
The process from first call to funded
No 60-second miracle. Real timing, from quick app to supplier payment.
- 1
Start the conversation
Day 0A quick app or a phone call. Free, no obligation. Tell us the basics so we can start the placement process for you.
- 2
Placement
Day 0–1We identify the institution and program that actually fits your business, revenue profile, and timeline. This step is at no charge to you.
- 3
Secure application
Day 1–3We send a secure application tailored to your program. You submit the full application and documents to the institution for underwriting, and we help you package it clean.
- 4
Underwriting
Day 3–7The institution reviews your file. We stay in the loop and help move things along.
- 5
Offer(s)
Day 5–10You receive your offer, or in some cases multiple offers to compare side-by-side. If nothing fits, you owe nothing.
- 6
Sign
Day 7–12You sign your agreement directly with the funding institution.
- 7
Funds land
Day 8–14Money hits your account.
- 8
Back to work
OngoingFunds are in, and you keep building.
What makes a PO file hard to place
- Gross margin under roughly 20%. The financing cost eats the deal.
- Consumer buyers. PO financing works on commercial and government orders only.
- Cancellable, partial-release, or consignment orders the funder cannot rely on.
- Heavy in-house labor and custom fabrication the funder cannot verify or resell.
- Suppliers who will not accept a letter of credit or direct payment.
- An existing UCC-1 on receivables that the incumbent lender will not subordinate.
PO financing versus the alternatives
Invoice factoring
Best: Cheaper, at roughly 1% to 3.5% per 30 days, and faster to set up.
Tradeoff: Only works after you ship and invoice. It cannot pay for the materials.
Supplier terms
Best: Free money when your supplier will extend net-60 on the order.
Tradeoff: Most suppliers will not extend that far on a large or first-time build.
Working capital advance
Best: Flexible use of funds and fast approval.
Tradeoff: Fixed debits start immediately, before the order has produced any cash.
Bank line of credit
Best: Lowest cost of capital available for production spend.
Tradeoff: Limits are sized to history, not to the order in front of you, and rarely grow fast enough.
Keep going
How PO financing works
Every step from confirmed order to takeout, with the documents each one needs.
Read morePO financing cost
Rate bands, the fees on top, and how cycle time changes your all-in number.
Read morePO financing for startups
Why a first-year shop with a strong buyer can qualify when a bank says no.
Read moreGovernment contract orders
Assignment of Claims, prime and sub work, and what federal buyers change.
Read moreInvoice factoring
The usual takeout for a PO facility once you ship and invoice.
Read moreOur PO program
Qualification detail, documents, and how we place your file.
Read morePurchase order financing FAQs
Purchase order financing pays your supplier or your production costs against a confirmed purchase order from a creditworthy commercial or government buyer. The funder pays the supplier directly, the goods get produced and delivered, you invoice the buyer, and the invoice proceeds repay the facility. It funds the gap between winning the order and getting paid for it.
Directionally 2% to 6% per 30 days on the amount advanced, with funding of up to 100% of verified supplier cost. Cost accrues by time outstanding, so a 45-day production and collection cycle costs roughly half of a 90-day one. Your actual number depends on the buyer's credit, your gross margin, the supplier, and the delivery risk.
No. It is transaction financing tied to one order or a set of orders. There is no fixed term or monthly amortization. Approval leans on the buyer's credit and the deal's economics rather than your credit score or years in business.
Most PO funders want at least 20% gross margin on the order, and 25% to 30% makes a file comfortable. The margin has to cover the financing cost and still leave you a profit. Thin-margin contract work is the most common reason a PO deal gets declined.
Yes, more often than with bank products, because the underwriting weight sits on the buyer and the transaction. A first-year shop with a confirmed $400K order from a national buyer is a real candidate. A startup with a verbal commitment and no signed PO is not.
2 to 4 weeks is the honest range for a first transaction, because the funder verifies the buyer, the supplier, and the production plan before releasing money. Repeat orders on an established facility move much faster, often inside a week.
That is the standard structure. PO financing covers production, then invoice factoring takes out the PO facility when you ship and invoice. Running both with the same institution avoids intercreditor fights over the receivable.
Consumer buyers, cancellable or partial orders, consignment terms, gross margin under roughly 20%, work-in-progress the funder cannot verify, and suppliers unwilling to work against a letter of credit or direct payment. Custom fabrication with heavy in-house labor is harder than finished-goods resale.
Ready to keep production moving?
Start with a quick app or a phone call. We'll tell you exactly what the right program requires. At no charge.
Apply. Fund. Deliver. No obligation.
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