At TradeUp, we are committed to helping our clients get the financing that best suits their unique needs. In addition to straight equity and debt raises, we can and do assist companies with more tactical financing such as Purchase Order (P.O.) Finance and Trade Finance.
If you are a manufacturer or distributor, you may be able to benefit from P.O. financing. As a manufacturer, P.O. finance can provide the cash flow needed to fulfill a large order that you would normally have to turn down. For example, if you have $1,000,000 order from a customer but need to borrow $500,000 to complete the order (buying raw materials, manufacturing, etc.), P.O. financing can provide this cash flow.
As a distributor, you may run into cash flow problems if vendors demand payments within 10 days, but your customers don’t pay for 30 days or more after being invoiced. This slows growth because you have to wait until customer payments are received before new orders with vendors can be made. P.O. financing can help speed things up, allowing you to receive payments sooner and turn around to make new orders with vendors.
To get an idea of what lenders look for in extending P.O. financing, here’s a short article from a lender’s perspective: https://cfa.com/eWeb/docs/tsl_archives_pdf/mar04_pg020.pdf.