Purchase Order Financing
Won a Purchase Order, Purchase Agreement, or Contract from your customer? Now you have to build product to fulfill the order. But, your cash reserves are insufficient to pay suppliers? Your suppliers demand C.O.D. payment, but your customers demand 30, 60, or 90 day payment terms?
Purchase Order Financing/Purchase Order Funding is a simple solution to this dilemma. PO Financing gives you immediate cash for your customer's purchase order, purchase agreement, or contract.
PO Financing provides you with a quick cash flow infusion enabling you to pay your expenses, expand, invest, or simply give you some breathing room. PO Financing is used by companies when they need:
- Fast cash infusion for additional working capital
- Quick response to an immediate sales opportunity
- Pay suppliers or distributors for materials, equipment, or services to fulfill sales orders
- Obtain short term financing without incurring additional debt or credit risk
- Conceal the identity of the buyers and sellers from one another
- Opportunity to take on larger orders and realize profits that would otherwise be impossible
- An experienced financial partner that knows how to leverage assets and opportunities.
PO Financing eliminates the need for cash to fund the cost of materials, pays your suppliers COD, gives you the flexibility to offer payment terms to your customers, and establishes credit with your suppliers. Here's how it works:
- You receive a purchase order from your customer
- You negotiate an order(s) for materials or equipment with your supplier(s)
- ARGO INTERNATIONAL INC. undertakes financing of the purchase of materials from your supplier(s)
- You take delivery of materials from your supplier(s) and we pay your suppliers' invoice(s).
- You build your product and ship it to your customer to fulfill the order
- You send the invoice for your customer's order to ARGO INTERNATIONAL INC.
- We invoice your customer for the order according to your payment terms
- When your customer pays us according to the invoice terms, our fee is deducted, and the balance is forwarded to you.
We finance purchase orders for all types of transactions including:
- U.S. Supplier to U.S. Buyer
- U.S. Supplier to Foreign Buyer
- Foreign Supplier to U.S. Buyer
- Foreign Supplier to Foreign Buyer
- Finished Goods
- Non-Finished Goods.
Example Transactions:
- US Supplier to US Buyer and US Supplier to Foreign Buyer.
You just received a large order and your supplier will not sell on credit or credit terms acceptable to you and do not want to or cannot extend your line of credit with your bank. ARGO INTERNATIONAL INC. will purchase the goods for you from your supplier, give you 45 days to produce the goods, charge you a purchase order fee and factor your receivables.
- Foreign Supplier to US Buyer
You are importing finished goods. You do not need to handle the goods, which will be shipped directly to the buyer, a large U.S. or Canadian retailer. ARGO INTERNATIONAL INC. will have opened a Letter of Credit to your supplier and will factor the receivables. When the goods are shipped, your supplier will get paid. When the goods are landed in the U.S. and shipped to the U.S. buyer, ARGO INTERNATIONAL INC. will factor the receivable and pay the purchase order from the funds advanced.
- Foreign Supplier to Foreign Buyer
You are an international broker. You are buying products from a reputable foreign supplier and selling them to a credit worthy buyer in another country. ARGO INTERNATIONAL INC. will finance the full transaction by wiring funds to your supplier and collect payment from the buyer, less our factoring fees, insurance and inspection fees.
Requirements: It is important that every purchase order transaction stand on its own merit. As part of the approval process, we consider your business and management history, the credit worthiness of the buyer, the ability of your supplier to produce and deliver the goods, and of course, the transaction must be profitable for all parties. For full requirement and application details, please see FILL OUT the form available on this website.
Business History & Credit: We consider funding those organizations with a track record of producing goods. Your company may be young or a start-up, but your company management must have a proven track record to produce the goods. We look primarily at the credit worthiness of your customer.
Buyers Purchase Order: Your buying firm must be reputable with a good credit standing or use letters of credit/bank guarantees to insure payment. The purchase order must be verifiable.
Suppliers: Your suppliers must know your product and be able to produce it in time and to meet your buyer's terms. The supplier must be a firm with a good business history and track record of producing goods.
Domestic or International Transactions: Purchase Order Financing can be applied to international transactions with the use of Letters of Credit.
Profitability: The transaction, after all expenses, must make a profit for all parties. Payment of the money funded to support the transaction can come from any number of sources such as factored receivables.
Costs: Generally, we charge a one-time fee for purchase order financing on the gross amount to be paid by the buyer. Fees are quoted based on the terms of the transaction, the type of equipment/materials financed, and the credit strength and history of the parties involved. By negotiating early or advance payment discounts with your suppliers, your effective cost of Purchase Order Financing can be minimal.