Purchase Order Financing

Purchase Order Funding is short term funding used to finance the purchase or manufacture of specific goods that have been pre-sold by your company to your end customer. P/O funding solves the classic problem of growing companies like yours --- you have sold more product than you have cash available to produce. Now what do you do? P/O funding is the key to your success, assuring that you keep the promises you've made to your customers.

Funding entails providing funds or issuing letters of credit that allow clients to secure the inventory they need to fulfill customers orders.

Purchase order funding is a tool that will allow you to accomplish the following:

• Secure payment to a third party supplier for finished goods that will be shipped directly to the end customer.
• Pay job-specific suppliers for raw materials.
• Purchase Order Financing is available only to qualified customers. P.O.

Financing falls into two types:

Finished Goods & Non-Finished Goods.

Finished Goods refers to transactions where the goods are never touched by you. Usually these goods go directly from your supplier to your buyer. You never take direct possession.

Non-Finished Goods are when you the seller take possession of the goods either in a raw state (such as material to make clothing) or a semi finished state (partially sewn clothing). In either case you must take
possession of the product.

Finished Goods are easier to finance than Non-Finished Goods. We will need to assess your ability to complete the transaction in processing the goods for the final shipment to your buyer. We finance both Finished and Non-Finished purchase order financing.

Benefits

Purchase Order Financing is used to pay your suppliers, laborers, or other intermediaries for goods or services to generate additional sales.

A company may require purchase order financing when:

• Expertise to handle the financing
• Additional working capital
• Quick response to an immediate sales need
• You will not incur additional credit risk.
• If it is your wish, your buyers and sellers do not need to know each other.
• You want the opportunity to make additional profit

At Tanner, we fully understand all the above reasons and will work with you to fulfill your needs.

Funding Criteria

Every purchase order transaction stands on its own. We look at your
business history, the credit worthiness of the buyer, the ability of your
supplier to produce the goods, and if the transaction is profitable for all parties.

Business History
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.

Buyers Purchase Order
Your buying firm must be reputable with a good credit line. The purchase order must be verifiable.

Supplier
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.

Profitability
The transaction after all expenses must make a profit for all parties.
Payment of the money lent to support the transaction can come from any number of sources such as factored receivables.

In order to consider P.O. Financing for your firm we will need:

• Completed P.O. Application Form
• Your invoice to buyer
• Your supplier's invoice
• Your purchase order to your supplier
• Profit on transaction - gross margins >at least 18%
• Business History
• P&L (most recent)
• Balance Sheet (most recent)
• Time frame to produce goods
• Credit information on your buyer
• Supplier Information