Purchase order financing pays the supplier when you already have the customer order — but not the cash to manufacture, source, or ship.
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
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.
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.