Purchase Order Factoring
Turn your purchase orders into immediate cash — finance up to 100% of your PO value.
LOAN RANGE
$50K – $10M
TURNAROUND
48–72 hours
Best for product-based businesses that receive large orders from creditworthy buyers but lack the upfront capital to pay suppliers and fulfill those orders.
About Purchase Order Factoring
Purchase order factoring is a specialized financing solution that provides the capital needed to fulfill large customer orders when you lack the working capital to pay suppliers upfront. Instead of turning down profitable orders due to cash constraints, PO factoring bridges the gap between receiving an order and delivering the finished product, financing up to 100% of your supplier costs.
This product is not a loan. Instead, a factoring company advances funds directly to your supplier to cover the cost of goods, raw materials, or manufacturing. Once the order is fulfilled and your customer pays, the factor collects payment, deducts their fees, and remits the remaining profit to you. This makes PO factoring an off-balance-sheet transaction that does not add debt to your financial statements.
Slate Financial works with factoring companies that handle both domestic and international purchase orders. This program is particularly valuable for importers, wholesalers, distributors, and manufacturers who receive large orders from creditworthy buyers but need working capital to fulfill them. By leveraging your customers' creditworthiness rather than your own balance sheet, PO factoring lets you take on larger orders and grow your business faster.
How It Works
- 1You receive a purchase order from a creditworthy customer and submit it to Slate Financial along with your supplier quote and basic business information.
- 2The factoring company evaluates the creditworthiness of your end customer (the buyer) and the viability of the transaction, not your personal credit or business financials.
- 3Upon approval, funds are advanced directly to your supplier to cover the cost of goods or manufacturing, enabling you to fulfill the order.
- 4You deliver the completed order to your customer, and the customer pays the factoring company according to the original invoice payment terms.
- 5Once the customer pays in full, the factoring company deducts their fee and remits the remaining profit to your business account.
Who Qualifies
- Business-to-business or business-to-government transactions with creditworthy end buyers
- Minimum gross margin of 15% or higher on the transaction to cover factoring fees and still yield profit
- Product-based businesses including importers, wholesalers, distributors, and manufacturers
- Purchase orders from established, creditworthy companies or government entities
- At least 6 months in business with a track record of fulfilling similar orders
Typical Terms
| Financing Amount | $50,000 - $10,000,000 per transaction |
| Advance Rate | Up to 100% of supplier costs |
| Factoring Fee | 1.5% - 6% of invoice value |
| Minimum Gross Margin | 15%+ recommended |
| Customer Payment Terms | Net 30 - Net 90 (buyer dependent) |
| Time to Fund Supplier | 48 - 72 hours after approval |
Pros & Cons
Advantages
Considerations
Ready to Apply for Purchase Order Factoring?
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Program Highlights
Required Documents
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Typical Timeline
48–72 hours
Timeline begins after all required documents are received and verified.