Purchase order financing, also referred to as PO financing, is an alternative way to access working capital, giving corporates borrowing alternatives. SMEs can access funds to pay suppliers before invoicing their buyers, eliminating the cash flow problems that represent many significant issues for small business owners.
Sharing a lot of similarities with short term loans, purchase order financing is used to pay for the production of goods only. This financing solution makes sure the buyers’ orders are fulfilled, and also keeps their record clean of other business loans. PO financing is a way to solve cash flow issues, allowing small businesses to fulfil otherwise impossible orders.
Benefits of purchase order financing