Purchase order financing pays the supplier when you already have the customer order — but not the cash to manufacture, source, or ship.
Purchase-order funding is arranged business credit; for income-producing real estate, review the separate loans from $2 million to $10 million.
It is transaction-specific: one PO (or a defined batch) in, goods out, customer pays, facility repays. Typical sizes run $250,000–$15 million over one to twelve months.
Jaken Finance Group arranges PO facilities for U.S. operating companies. We do not name capital sources on the site.
Attach or describe: customer PO, supplier quote, margin, ship date, and expected collection date.
PO financing vs inventory vs AR
| Stage | Product | Collateral / source |
|---|---|---|
| Need to buy for a signed order | PO financing (this page) | The PO + shipment |
| Need general stock on the shelf | Inventory financing | Inventory turnover |
| Already shipped and invoiced | Accounts receivable financing | Outstanding invoices |
| Need $50K–$500K, no asset | Unsecured term loan | Personal/business credit |
PO financing sits earliest in the cycle — before goods exist or before you can invoice.
When PO financing wins
- Enterprise or government PO with payment terms longer than your supplier demands
- New customer large enough to move the needle but unknown to your bank
- Manufacturing run where raw materials must be paid before WIP becomes billable
- Software or services PO where delivery costs hit before milestone billing (structure varies by file)
The economic test: does the PO margin cover the cost of short-term capital and still leave room? If margin is thin, PO financing may not be the right tool — renegotiate terms or walk.
How a PO file is underwritten
- Customer credit — Who is paying the invoice? Investment-grade buyer vs startup matters.
- Supplier reliability — Can they hit the ship date?
- Margin — PO value minus landed cost minus financing cost
- Track record — Have you fulfilled similar orders?
- Documentation — PO, quote, manufacturing or freight timeline, historical collections if repeat buyer
Worked illustration: manufacturing PO (composite)
Illustration only — not a live quote.
A $22 million contract manufacturer receives a $2.4 million PO from an industrial OEM. Raw materials and outside processing must be paid in fourteen days. OEM payment terms are net-60 after acceptance.
- Facility: $1.6 million for four months
- Structure: Supplier payments funded at draw; repayment from OEM remittance
- Collateral: PO assignment, WIP, and corporate guaranty — quoted per file
- Why not SBA? LOI on the PO expires before 7(a) would close
Full program context: short-term working capital loans.
Worked illustration: distribution PO (composite)
Illustration only — not a live quote.
A $11 million specialty foods importer holds a $780,000 PO from a regional grocery chain. The overseas supplier requires 50% prepay to release the container.
- Facility: $390,000 for three months
- Repayment: When the chain pays net-45 after delivery
- Contrast: Inventory financing would fit if the buy were for warehouse stock, not one named PO
Margin test before the supplier deadline
A signed purchase order is a promise that the customer will pay you. It is not cash the supplier will accept. Three dates have to fit inside the facility. You pay the supplier. You ship. The customer pays you before the advance matures.
SBA 7(a) loans can fund short-term and long-term working capital. That page caps a 7(a) loan at $5 million. The program also covers real estate, equipment, and furniture. It can fit a patient order. It is a weak fit when the supplier will cancel the release inside two weeks. Jaken Finance Group arranges purchase-order facilities from $250,000 to $15 million, for one to twelve months. A complete file is quoted in three to ten business days. The price is set per file. There is no published rate card for this product.
SBA 504 loans do not fund a goods order. That page says a 504 loan cannot be used for working capital or inventory. It also cannot fund speculation or investment in rental real estate. The maximum 504 loan stated there is $5.5 million. Repayment terms are 10, 20, and 25 years. The page says fees total about 3% of the debt, and that cost may be financed. Use 504 for an owner-occupied project. Use a purchase-order facility for one named shipment.
Illustration: a thick margin and a thin one
Example only. These dollars are not a quote from Jaken Finance Group.
A distributor holds a $900,000 order from a grocery wholesaler. The supplier releases the goods for $540,000. Freight and duty are $36,000. Landed cost is $576,000. Margin before financing is $900,000 minus $576,000, which is $324,000. That is 36% of the order.
Suppose a term sheet costs $18,000 all-in on a three-month advance of $576,000. Divide $18,000 by $576,000. The cost is 3.125% of the advance for the whole period, not a yearly rate. Margin left is $324,000 minus $18,000, or $306,000. This order can carry the facility.
Change only the supplier price. If landed cost were $840,000, margin before financing would be $60,000. The same $18,000 cost would take 30% of that margin. At that spread, renegotiate the order or walk away. The $18,000 figure is a stress test. It is not a fee schedule.
What the advance should pay
Draws should match supplier invoices. A round number with no bill behind it is a red flag. Underwriting wants six items.
| Item | What gets checked |
|---|---|
| Customer order | Signed price, quantity, and delivery window |
| Supplier quote | Same goods as the order |
| Landed-cost sheet | Product, freight, duty, and packaging |
| Collection date | Written terms, such as net 45 |
| Prior fills | Proof you shipped a similar order |
| Short-pay plan | Who covers a deduction or a rejection |
Retail demand is one reason large buyers still write these orders. The Census Bureau’s advance release for August 2026 put seasonally adjusted U.S. retail and food services sales at $773.9 billion. Sales were up 1.2% from July and up 6.0% from August 2025. The figures are not adjusted for price. The release, dated September 16, 2026, showed a margin of ±0.4 percentage points on the monthly change and ±0.5 on the yearly change. Both increases were larger than those margins. See the August 2026 retail sales page. Those totals are not a credit score for your buyer. They only show that retail throughput was still rising that month.
Partial shipments and progress bills
Some orders do not ship in one truck. Split the facility the same way. If half the goods release in week two and half in week six, do not draw the second half on day one. Idle cash still has a cost, and it tempts a borrower to cover payroll.
Example only. A $600,000 order needs $360,000 of supplier payments. The first release is $200,000 of goods. The second is $160,000 thirty days later. Draw $200,000, then $160,000. Do not draw $360,000 on Monday and park $160,000 in the operating account. If the second release slips, you have paid for money you could not use. Say that schedule in the request so the term sheet matches the bills.
A progress bill from a manufacturer is the same idea. Fund the milestone that is due, against the purchase order that names it. When the customer accepts the goods, the collection date should already be on the file. If acceptance is “when our engineer signs,” ask how many days that signature usually takes. A net-45 term that starts at acceptance can become net-75 in real life. The facility maturity has to cover the slow case, not the hopeful one.
How the facility gets repaid
Repayment should come from the customer’s remittance. It should not come from a new loan. If the structure assigns the invoice, the payoff wire has to be obvious. Keep that collection away from payroll. If the customer short-pays, the leftover balance is the borrower’s problem. A second advance should not paper over a deduction you already know about.
Once the goods ship and an invoice exists, the next product is often accounts receivable financing. If you are filling a warehouse with no named order, look at inventory financing instead. Do not stack all three on the same goods unless the payoff order is in writing.
Reasons a purchase-order file dies
- The “order” is still a quote. Nobody has signed it.
- The supplier raised the price after you sent the file.
- Freight wipes out the margin that made the deal work.
- The buyer is an affiliate of the borrower.
- Shipment depends on a permit you have not filed.
- You need the cash for payroll, not for this order.
Jaken Finance Group will not treat a general cash need as a purchase order. The story is the order, the goods, and the collection. A wider menu sits on the short-term working capital page. Real estate loans are a different desk. Fix-and-flip and bridge loans close in 7–10 business days at 8.99%–13.5% interest-only. They do not pay a supplier invoice. A DSCR rental loan closes in about 14 business days and is priced from 5.75%–10.5%. It is also the wrong product for a goods order.
Five numbers to put in the request
Use the commercial request form and write the file in dollars and dates.
- Customer legal name and the order amount.
- Supplier legal name and the deposit due date.
- Landed cost and the expected gross margin in dollars.
- The day you expect to ship and the day you expect to be paid.
- Whether this buyer paid you on time in the last twelve months.
A $400,000 order with a $250,000 supplier bill and a 50-day collection is easier to read than a note about growth. If the shipment is one order and it is above the $5 million 7(a) cap, say so. The arranged facility can be discussed up to $15 million. It is still underwritten one order at a time. Call (833) 264-7776 if the supplier’s wire date is inside five business days and the order is already signed.
PO financing vs SBA and unsecured
| Path | Clock | Typical fit |
|---|---|---|
| SBA 7(a) | 45–90+ days | Cheaper, general WC — misses urgent PO |
| Unsecured term loan | 3–10 days | $50K–$500K, no PO structure |
| PO financing | 3–10 days on complete PO file | Seven-figure order, supplier deadline |
| Merchant cash advance | Days | Last resort — refinance via MCA payoff |
See short-term working capital vs SBA for the full decision table.
Submit a PO scenario
Include customer name, PO amount, supplier quote, ship date, and expected customer payment date in the notes.
What to expect after you submit
A complete PO file usually gets a term sheet or pass within three to ten business days when customer credit, supplier quote, and margin are documented. Incomplete files stall on missing supplier terms or unsigned PO language. Have your corporate guaranty, UCC search, and historical fulfillment data ready if the order size is new for your company. If the customer is a first-time buyer, be prepared to discuss payment history on similar contracts or parent-company credit support. Repeat PO relationships with the same buyer often close faster because collections history is already on file.
Related: Business acquisition bridge · SBA alternative financing · (833) 264-7776
Jaken Finance Group arranges purchase order working capital for U.S. operating companies. Pricing quoted per file. Not an offer to lend.