Purchase Order Financing
Suppliers paid directly, so you can fulfill an order bigger than your cash position.
Let's fund your purchase order.
Two questions to start. No obligation, no credit pull.
How it works
When you hold a confirmed government purchase order for goods, the constraint is usually not demand. It is the cash required to pay suppliers before the agency pays you. Purchase order financing resolves that directly: the financing provider pays your suppliers so the goods can be produced and delivered, and is repaid when the agency settles the resulting invoice.
This is what allows a distributor or product supplier to accept an order several times larger than anything they have previously fulfilled. The order itself, and the creditworthiness of the government buyer behind it, carry the transaction rather than your cash position.
It is deliberately narrow. Purchase order financing applies to confirmed orders for goods, and it ends when the invoice is raised. Contractors frequently pair it with factoring or a contract line so that the gap between delivery and agency payment is covered by the same arrangement that funded the suppliers.
How the facility is structured.
Funds go to your supplier so production and delivery can proceed.
The confirmed government order and buyer credit carry the transaction.
Accept orders beyond what your own cash position would support.
Rolls into invoice financing once the goods are delivered and invoiced.
Purchase Order Financing questions, answered.
Does purchase order financing work for services contracts?
Rarely. It is built around paying suppliers for goods against a confirmed order. Services contractors, whose main cost is labor, are generally better served by payroll funding or a contract line of credit.
What happens after the goods are delivered?
The order converts to an invoice, and the financing is repaid when the agency pays. Many contractors pair purchase order financing with invoice factoring so the wait for agency payment is covered by the same arrangement.
Do I need the purchase order in hand?
Yes. A confirmed order is what the financing is secured against. This is not a product for orders you expect to receive.
Ready to fund your contract?
No obligation, talk to a govcon financing specialist, not a call center. We'll structure capital around your award.