Purchase Order Financing
Purchase order (PO) financing provides funding to fulfill customer orders by paying suppliers directly, using the confirmed purchase order and the resulting receivable as the basis for the advance. It helps businesses take on orders larger than their available cash. ASBCLF connects applicants with lenders offering PO financing.
What Is Purchase Order Financing?
With PO financing, a lender pays your supplier to manufacture or ship goods for a confirmed customer order. Once the customer receives the goods and pays the invoice, the lender is repaid from those proceeds and you keep the remaining margin. It is typically used for non-perishable, finished goods with reliable end-customers.
How It Works
- Submit an application through ASBCLF with a confirmed purchase order and supplier quote.
- ASBCLF matches your application with lenders offering PO financing.
- The lender verifies the order, the supplier, and the customer’s creditworthiness.
- The lender pays your supplier; goods ship to the customer; the customer’s payment repays the lender.
Typical Use Cases
- Fulfilling large one-time orders
- Government or corporate contracts
- Seasonal demand spikes
- Expanding into new markets
- Orders that exceed available cash
Eligibility Considerations
- Confirmed purchase order from a creditworthy customer
- Reliable supplier
- Finished, non-perishable goods
- Gross margin sufficient to cover fees
- Established business history
Eligibility varies by lender and program. ASBCLF submits your application to its lender network; individual lenders set their own criteria and make their own decisions.
Documents You May Need
- Purchase order from the customer
- Supplier quote or invoice
- Customer account information
- Business financial statements
- Business history and references
Repayment Structure
There is no traditional repayment—the lender is paid from the customer’s invoice payment. The cost is a fee based on the order size and time to fulfillment. Once the customer pays, the lender deducts its advance and fees, and you receive the remaining margin.
How It Compares
PO financing funds order fulfillment without using your own cash. See how it compares to related financing.
Frequently Asked Questions
What is purchase order financing?▾
Purchase order financing funds the fulfillment of a confirmed customer order by paying your supplier directly. The lender is repaid from the customer’s payment once the goods are delivered, and you keep the remaining margin.
How is PO financing different from invoice factoring?▾
PO financing funds the production or purchase of goods before they ship. Invoice factoring provides cash after the goods are delivered and invoiced. Some transactions use both, sequentially.
What orders qualify for PO financing?▾
Lenders prefer confirmed orders for finished, non-perishable goods from creditworthy customers and reliable suppliers. Orders for services, raw materials, or highly perishable goods often do not qualify.
Do I need to repay a PO financing advance?▾
Not in the traditional sense. The advance is repaid from your customer’s payment, not from your business cash. The cost is a fee deducted from the proceeds, so your margin must be large enough to cover it.
Ready to explore purchase order financing?
Submit a single application and ASBCLF will match you with lenders suited to your business.
Apply for Business FinancingPage last reviewed: 2026-09-26.