Saying "no" to a major sales opportunity because of cash flow is incredibly frustrating. You have the demand and the ability to deliver, but you’re stuck without the capital to pay suppliers upfront. This barrier can stop your growth cold. But what if you never had to turn down a big order again? Purchase order financing is a powerful tool that removes this obstacle. It’s not a loan; it’s a transaction-based solution that helps you scale. This guide shows you exactly how to get funding for a large purchase order, so you can confidently say "yes" to every opportunity.

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Key Takeaways

  • Say 'Yes' to Big Orders Without Draining Your Cash: Purchase order financing is a specialized tool that pays your suppliers directly, letting you fulfill large customer orders you couldn't otherwise afford. It’s a transaction-based advance, not a traditional loan that adds debt to your books.
  • Your Customer's Credit is Your Key to Approval: Unlike typical loans, lenders focus more on your customer's financial stability and the deal's profitability than on your own credit history. This makes it a great option for growing businesses with reliable, creditworthy clients.
  • Prioritize Profitability and a Transparent Partner: Before you commit, calculate all financing fees to ensure your profit margin remains healthy. Choose a lender who is upfront about costs and can fund you quickly, acting as a true partner in your growth.

What is Purchase Order Financing & How Does It Work?

Imagine a huge, game-changing order lands in your inbox. It's the kind of deal that could put your business on the map. The excitement is real, but then a wave of panic might set in—how will you pay your supplier to get it made without tying up all your cash? This is the exact problem that purchase order (PO) financing is designed to solve.

Think of it as a specialized, short-term funding solution where a financing company provides the capital to cover your supplier costs. Instead of giving you the money directly, they typically pay your supplier on your behalf. This allows you to fulfill a large customer order you might otherwise have to turn down. It’s a fantastic option for businesses, especially those in wholesale, distribution, or importing, that have confirmed orders but are constrained by cash flow.

Unlike a traditional business term loan, the lender's decision isn't based solely on your company's credit history or years in business. Instead, they focus more on the creditworthiness of your customer, the reliability of your supplier, and the profitability of the specific deal. This makes it an accessible tool for growing businesses to take on bigger projects without draining their working capital. It’s not just a lifeline for companies in a tight spot; many successful businesses use it as a proactive tool for financial management and strategic growth, letting them say "yes" to major opportunities with confidence.

Why Cash Flow is a Major Hurdle for SMBs

For many small and medium-sized businesses, cash flow isn't just a line on a spreadsheet—it's the lifeblood that determines whether you can seize an opportunity or watch it pass by. Landing a massive order from a reputable customer should be a moment of triumph. But if you don't have the cash on hand to pay your suppliers for the raw materials or finished goods, that triumph quickly turns into a major roadblock. This is one of the most common and frustrating growth pains for entrepreneurs. You have proven demand and a clear path to revenue, but you're stuck because your working capital is tied up. It’s a classic catch-22 that can stall momentum and even damage your reputation if you’re forced to turn down a big sale.

Breaking Down the PO Financing Process

So, how does this actually play out? The process is pretty straightforward. First, your customer places a large purchase order with you. Instead of turning it down, you bring that PO to a financing company. They'll verify the order and your supplier. Once approved, the financing company pays your supplier directly to produce and ship the goods to your customer. After your customer receives the order, they pay the financing company. Finally, the financing company deducts their fees and sends the rest of the profit to you. It’s a clean process that lets you focus on delivering for your customer, not scrambling for funds.

Step 1: The Lender Pays Your Supplier

Once you have a verified purchase order from your customer, you’ll present it to your financing partner. They will review the deal, focusing on your customer's creditworthiness and your supplier's ability to deliver. After approval, the financing company doesn't just hand you a check; they pay your supplier directly. This crucial step ensures the funds are used exactly as intended—to get your product made or sourced. It takes the burden of that large, upfront payment completely off your plate, freeing up your own capital for day-to-day operations while the order is fulfilled.

Step 2: The Supplier Fulfills the Order

With payment secured, your supplier can now get to work. They will manufacture or assemble the goods and ship them directly to your customer. This is where the magic happens. You’ve effectively bridged the cash flow gap without touching your own working capital, allowing your supply chain to move forward without delay. The financing company handles the financial logistics with the supplier, often using a secure payment method like a letter of credit, so you can focus on customer communication and preparing for your next big sale.

Step 3: Your Customer Pays the Lender

After your customer receives their goods, you will send them an invoice just as you normally would. However, the payment instructions will direct them to pay the financing company instead of you. This is a standard and critical part of the arrangement. The financing company collects the full payment for the order, which repays the initial advance they made to your supplier. This direct payment structure simplifies the collection process and provides security for the lender, meaning you don't have to worry about chasing down the payment yourself.

Step 4: You Get Paid

This is the final and most rewarding step. Once your customer’s payment clears, the financing company deducts its fees from the total amount collected. The remaining balance—which is your profit—is then transferred directly to your business bank account. The transaction is now complete. You successfully fulfilled a large order, kept your customer happy, and generated revenue, all without the initial capital constraints. It’s a clean and efficient way to protect your profit margin while scaling your operations.

How PO Financing Can Help Your Business Grow

The biggest advantage of PO financing is that it allows you to accept orders you couldn't otherwise afford, letting you grow your business without limits. Because the decision is based heavily on your customer's credit and the transaction's viability, it can be easier to get than a traditional bank loan. This type of funding also keeps your cash flow free for daily operations, since you aren't using your own money to pay suppliers upfront. Best of all, it doesn't add long-term debt to your books. Once the order is fulfilled and everyone is paid, the deal is done, leaving you ready for the next big opportunity.

Funding a Large Purchase Order? Here Are Your Options

Landing a massive purchase order is a huge win. It’s the kind of moment that can change the trajectory of your business. But that initial excitement can quickly turn into stress when you look at your bank account and realize you don’t have the cash on hand to pay your suppliers and actually produce the goods. This is a classic growing pain, and frankly, it’s a good problem to have because it means you're growing. The key is knowing how to solve this cash flow crunch without draining your working capital or, even worse, turning down the order.

Fortunately, you have several solid funding options to bridge this critical gap between getting the order and getting paid. Each one works a little differently, so the right choice depends on your business's specific situation, your customer's payment terms, and how quickly you need the cash. Some options are designed specifically for this scenario, while others provide more general financial flexibility. Let's walk through the most common ways to get the capital you need to fulfill that big order and keep your business moving forward with confidence.

When to Use Purchase Order Financing

Purchase order (PO) financing is designed specifically for this situation. It’s not a traditional loan; instead, a financing company provides the capital you need to pay your supplier directly. Once your supplier ships the goods to your customer, the customer pays the financing company. The company then deducts its fees and sends the remaining profit to you. The best part? Approval often depends more on your customer's creditworthiness and the validity of the purchase order than on your own credit history. This makes it an accessible option for newer businesses or those with less-than-perfect credit who have a reliable, creditworthy customer.

The Classic Route: Traditional Business Loans

A traditional business loan can also provide the funds to cover a large order. Unlike PO financing, the money from a business term loan is deposited directly into your account, giving you more control over how you manage payments to your suppliers. This option is generally best for established businesses with strong credit and a solid financial history. Lenders will want to see a clear business plan and evidence that you can handle the fixed repayment schedule. If you qualify, a term loan can be a straightforward way to secure a lump sum of cash for a significant one-time expense.

The Flexible Choice: A Business Line of Credit

Think of a business line of credit as a flexible financial safety net. Instead of a one-time lump sum, you get access to a pool of funds that you can draw from as needed. You only pay interest on the amount you actually use, and as you repay it, your available credit is replenished. This makes it a fantastic tool for managing the unpredictable costs of fulfilling large orders. You can use it to pay suppliers, cover shipping, or handle any other expenses that pop up. It’s a reusable resource that gives you the agility to say "yes" to big opportunities whenever they arise.

A Modern Approach: Revenue-Based Financing

If your business has consistent sales but you want to avoid taking on traditional debt, revenue-based financing is an excellent alternative. With this model, you receive an upfront cash advance in exchange for a small percentage of your future daily or weekly revenue. Repayments are tied directly to your sales, so you pay back more when business is strong and less during slower periods. This flexibility can be a lifesaver when you’re waiting on a large invoice to be paid. It aligns your funding costs with your cash flow, making it a smart way to get the capital you need without the pressure of a fixed monthly payment.

Invoice Factoring and Invoice Financing

If you’ve already delivered the goods but are stuck waiting 30, 60, or even 90 days for your customer to pay, invoice factoring or financing can help. With invoice factoring, you essentially sell your unpaid invoices to a factoring company at a discount. They give you a large percentage of the invoice amount upfront and then collect the full payment from your customer, sending you the rest minus their fees. Invoice financing is slightly different; you use your invoices as collateral to get a loan. In both cases, you’re unlocking cash that’s already yours but is tied up in accounts receivable. This is a great way to manage cash flow after a big sale is complete.

Inventory Financing

Sometimes, the challenge isn’t just paying a supplier for one specific order, but having enough stock on hand to meet growing demand. This is where inventory financing comes in. It’s a type of loan that uses your existing inventory as collateral, giving you the capital to purchase more products. Lenders see your inventory as a tangible asset that secures the loan, which can make it easier to qualify for than other types of funding. This option is ideal for businesses that need to build up their stock in anticipation of a busy season or to fulfill multiple large orders at once, ensuring you never have to turn down a sale because your shelves are empty.

Merchant Cash Advances (MCAs)

A merchant cash advance (MCA) offers a lump sum of cash in exchange for a percentage of your future credit and debit card sales. It’s not technically a loan but an advance on your future revenue. Repayment is automatic, with a small percentage taken from your daily card transactions until the advance is paid back. While MCAs provide incredibly fast access to capital, they often come with high costs. This option can be a fit for businesses with high daily card sales that need immediate cash for an emergency or a time-sensitive opportunity. However, it’s crucial to fully understand the terms and total payback amount before committing.

Do You Qualify for PO Financing? What Lenders Look For

One of the best things about purchase order financing is that the qualification process looks a little different from a typical business loan. Instead of focusing solely on your company’s credit score and financial history, lenders take a broader view of the entire transaction. They’re most interested in the likelihood of getting paid by your customer once the order is fulfilled.

This unique approach can open doors for newer businesses or those with less-than-perfect credit. Lenders evaluate a few key areas to determine if the deal is a good fit. Understanding what they’re looking for will help you prepare a strong application and increase your chances of getting the funding you need to grow. Let’s walk through the main factors they’ll consider.

It's Not About You: Why Your Customer's Credit Matters

This is the big one. With PO financing, the lender is primarily concerned with your customer's ability to pay their invoice. If you’re working with a reputable, financially stable company that has a strong payment history, your chances of approval are much higher. Think of it this way: the lender is betting on your customer’s credit, not just yours. This is why it’s often easier to secure this type of funding than a traditional loan. Before you apply for financing, make sure you’re confident in your customer’s financial standing and can provide documentation to prove their reliability.

Your Track Record: Business History and Revenue

While your customer’s credit is the main event, your own business isn’t completely offstage. Lenders will still want to see that you have a solid track record and the operational ability to manage the order. They aren't expecting a perfect credit score, but they do need to feel confident that you can successfully coordinate with your supplier and deliver the final product to your customer. A history of consistent revenue and experience in your industry helps demonstrate that you’re a reliable partner. This shows them you can hold up your end of the bargain, which is essential for the entire transaction to succeed.

Why Strong Supplier Relationships Are Key

Your supplier is the third key player in this transaction, and your relationship with them matters. A lender needs to trust that your supplier can produce and deliver the goods as promised, on time, and to the right quality standards. A strong, established relationship with a reputable supplier is a huge plus. Lenders will verify that the purchase order is for real, tangible products and that your supplier is capable of fulfilling it. Having clear agreements and a positive history with your suppliers can make the approval process much smoother and shows the lender that your supply chain is dependable.

The Details: Your Product and Profit Margins

Finally, the deal itself has to make financial sense. Lenders will look closely at the numbers to assess the profitability of the transaction. Generally, they want to see a gross profit margin of at least 15-20%. This margin ensures there’s enough cash to cover the financing fees and still leave a healthy profit for your business. The order should also be for a finished product, not a service or something sold on consignment. A clear, non-cancelable purchase order with solid profit potential is exactly what a lender wants to see. If your business model is different, revenue-based financing might be another great option to explore.

Minimum Order Size and Business Type

Purchase order financing isn't a one-size-fits-all solution; it’s tailored for a specific business model. This type of funding is designed for companies that resell or distribute finished products. If you're a manufacturer creating goods from raw materials or a service-based business, this probably isn't the right fit. Lenders need to see a clear transaction where you act as the bridge between a reliable supplier and a creditworthy customer. The size of the deal also matters. Most financing companies look for purchase orders of a certain value, often starting around $50,000, to ensure the transaction is worthwhile. This is because the profit margin, which typically needs to be at least 15-20%, must be substantial enough to cover financing costs and still leave your business with a healthy return.

How to Prepare Your Business for PO Financing

Landing a huge purchase order is exhilarating, but that excitement can quickly turn to stress if you don’t have the cash to fulfill it. Before you start applying for funding, taking a few key steps can make the entire process faster and smoother. Think of it as getting your house in order before company arrives. A little preparation shows potential lenders that you’re a serious, organized business owner who is ready to scale. It positions you as a low-risk partner and significantly increases your chances of getting a quick "yes." When you have everything lined up, you can move with confidence and get the capital you need to deliver for your customer without missing a beat.

Get Your Paperwork in Order

Before a lender can give you money, they need to see the paperwork. Start by gathering all the essential documents related to the deal. This includes the purchase order from your customer, a detailed quote or pro-forma invoice from your supplier, and your business formation documents. Lenders will also want to verify that the deal is profitable, so be prepared to show that your profit margins are solid—typically over 20%. Having these files organized and ready to go will speed up your application. When you can provide everything a lender asks for promptly, it signals that you’re on top of your business. You can get a head start by reviewing an application form to see what information is typically required.

How to Improve Your Business Credit Score

While your personal and business credit scores are important, one of the unique things about purchase order financing is that the lender is often more interested in your customer's creditworthiness. After all, they are the one who will ultimately pay the invoice. Approval can be easier than with traditional loans because the lender is betting on your customer's ability to pay. That said, maintaining good business credit is always a smart move. It keeps your options open for other types of funding, like a business term loan or a flexible line of credit, which can be useful for managing day-to-day cash flow while you wait for larger orders to come through.

Nurture Your Supplier Relationships

Your relationship with your supplier is a critical piece of the puzzle. A lender needs to be confident that your supplier can deliver the right goods, on time, and as promised. They will likely vet your supplier to ensure they are reliable and financially stable. You can strengthen your case by demonstrating a positive history with your supplier. Provide records of past successful orders or even a letter of reference. If you’re working with a new supplier, make sure they have a stellar reputation and can provide their own references. A dependable supplier minimizes risk for the lender and makes it much easier for them to approve your funding request.

How Much Funding Do You Really Need?

This might sound obvious, but you need to know exactly how much money you need and be certain the deal is profitable after financing costs. Before you apply, map out all the expenses required to fulfill the order, including the cost of goods, shipping, and any other related fees. Then, get a clear idea of the financing costs. The goal is simple: "Make sure the interest you pay on the loan is less than the profit you expect to make on the sale." If the numbers don’t add up, the deal isn’t worth it. Presenting a clear, well-researched calculation to a lender shows that you’ve done your homework and that their investment will lead to a profitable outcome for everyone.

What Does Purchase Order Financing Really Cost?

Purchase order financing can be a game-changer for fulfilling large orders, but it’s crucial to understand exactly what you’ll pay. The costs can be higher than other types of business funding, so going in with a clear picture of the fees helps you protect your profit margins. The total cost isn't just one single number; it's a combination of different fees that depend on the lender, the size of your order, and how long it takes your customer to pay their invoice. Let's break down the main costs you can expect to see.

Breaking Down the Main Costs: Fees and Rates

The primary cost of PO financing comes in the form of factor fees. Think of this as the lender’s service charge for advancing you the money. These fees typically range from 2% to 4% as a markup on your cost of goods sold. Lenders often charge this fee on a monthly basis, usually between 1% and 6% of the supplier's costs for every month the invoice is outstanding. When you do the math, this can translate into a high annual percentage rate (APR)—often exceeding 20% and sometimes climbing past 50%. Because of this, it’s important to compare these rates to a more traditional Term Loan to see which makes more sense for your bottom line.

How Time and Other Factors Affect Your Fees

The single biggest factor that influences your total cost is time. Since fees are typically charged monthly, the longer it takes your customer to pay their invoice, the more you'll pay. A 30-day payment cycle will cost you significantly less than a 90-day cycle. This is why it’s so important to have a clear understanding of your customer's payment terms before you agree to the financing. Other factors, like the size of the transaction and your customer's credit history, can also play a role in the rate you're offered. A larger order from a highly reputable customer might secure a lower fee. Before you commit, it's essential to map out all your expenses and project the final cost based on your customer’s expected payment date to ensure the deal remains profitable.

Don't Forget Processing and Admin Fees

On top of the factor fees, many lenders also charge for processing and administration. These fees cover the work involved in setting up the financing, verifying the purchase order, and managing the transaction. While they might seem small individually, they can add up and impact your total cost. These charges vary widely from one lender to another, so it’s one of the most important things to ask about upfront. Before you agree to anything, make sure you get a complete and clear breakdown of all administrative fees so there are no surprises when it’s time to settle up. A transparent lender will have no problem providing this information.

How to Spot Potential Hidden Fees

Finally, you need to be on the lookout for less obvious costs that can be tucked away in the fine print. Some agreements might have fees related to limited coverage, which means the lender won’t cover the full amount you need. Others can create margin pressure if the costs eat too deeply into your profits on the sale. The overall expense of PO financing can be higher than other options, so it’s wise to explore alternatives. For ongoing or fluctuating cash flow needs, a business Line of Credit might offer more flexibility and clearer costs. Doing your homework helps you make a smart, confident decision for your business.

Risks and Disadvantages to Consider

While purchase order financing is an incredible tool for growth, it’s not the right fit for every business or every situation. Like any financial product, it comes with its own set of potential downsides that you need to weigh carefully. Being aware of these risks ahead of time helps you make a fully informed decision and ensures you’re choosing a funding path that truly aligns with your business goals. Understanding the potential drawbacks, from costs to customer relationships, is just as important as knowing the benefits.

Loss of Control and Customer Perception

One of the biggest trade-offs with PO financing is that you invite a third party into your business operations. The financing company will communicate directly with your supplier and, most importantly, your customer. When your customer is instructed to pay the financing company instead of you, it can sometimes create the impression that your business is facing cash flow problems. This might not be an issue with a new client, but for long-standing relationships where you’ve built trust, it’s a dynamic worth considering. You give up a degree of control over these key interactions, which can be a significant factor for business owners who pride themselves on managing the entire customer experience.

Inflexible Funds and Supply Chain Dangers

The capital you receive from PO financing is highly specific. It can only be used to pay the supplier for the goods in that single purchase order; it’s not a flexible fund for other business expenses like payroll or marketing. This type of financing is also designed exclusively for businesses selling physical products, so it won’t work for service-based companies. Furthermore, your success becomes heavily dependent on your supplier's reliability. If they fail to deliver the goods on time or meet quality standards, it’s your reputation on the line, and it can complicate the entire financing arrangement. For more adaptable funding to cover a range of needs, a business line of credit might be a better tool to have in your back pocket.

Common Purchase Order Financing Myths & Mistakes

Purchase order financing can be a game-changer for growing your business, but it’s often misunderstood. These misconceptions can prevent you from using a powerful tool that could help you scale. Let's clear up some of the confusion and walk through the common hurdles so you can approach PO financing with confidence. By understanding the realities, you can avoid costly mistakes and make smart decisions that set your business up for success.

Common Myths About PO Financing, Debunked

Let's start by tackling some of the biggest myths about PO financing. First, many people think it’s only a last resort for businesses that are struggling. The truth is, smart, healthy companies use it as a proactive tool for growth. It allows you to say "yes" to massive orders without draining your cash reserves. Another common myth is that only well-established businesses can qualify. That’s simply not true. Lenders are more focused on the credibility of your customer and the profitability of the specific order, making it accessible even for newer businesses with a solid deal on the table. Finally, don't confuse PO financing with a traditional business term loan. It’s not debt that sits on your balance sheet; it’s a cash advance tied to a specific sale, preserving your credit for other needs.

What to Do If You Hit a Funding Roadblock

One of the main reasons businesses seek PO financing is to solve cash flow constraints. If you’re a wholesaler, manufacturer, or B2B company, you know the pain of waiting 30, 60, or even 90 days for a customer to pay. PO financing bridges that gap, giving you the capital to pay your suppliers and fulfill the order without delay. Another hurdle can be finding the right financing partner. You need a lender who is transparent, fast, and understands your business. Look for a partner who offers a streamlined process and is genuinely invested in your success. Finally, be mindful of your profit margins. PO financing comes with fees, so you need to ensure the deal is profitable enough to make it worthwhile. Run the numbers carefully before you commit.

Costly Application Mistakes to Avoid

When you’re ready to apply, a little preparation goes a long way in avoiding common pitfalls. The biggest mistake is not understanding the full cost. Some lenders have hidden fees that can catch you by surprise, so always ask for a clear, itemized breakdown of all charges. Another common error is submitting an incomplete or disorganized application. Have all your documents ready to go—the purchase order, supplier information, and details about your business. A clean application makes the process faster and smoother for everyone. Lastly, choosing the wrong partner can be a costly mistake. You want a lender who is responsive and supportive. When you’re ready to move forward, a simple and clear application process can make all the difference.

Ready to Apply? How to Choose the Right Lender

Once you’ve gathered your documents and crunched the numbers, it’s time to find a funding partner and submit your application. This is where all your preparation pays off. Choosing the right lender is just as important as having a solid purchase order. You’re not just looking for cash; you’re looking for a partner who can move as quickly as your business does and who understands your goals. A great financing partner can become a long-term asset for your company’s growth, providing support beyond a single transaction.

Not All Lenders Are Equal: What to Look For

When you’re evaluating lenders, look for three key things: speed, transparency, and partnership. How quickly can they get you funded? In business, opportunities don’t wait, so you need a lender who can approve and deliver funds within hours or days, not weeks. Transparency is also crucial—you should be able to easily understand all the fees and terms without digging through pages of jargon. A good financing partner will be upfront about their costs. Finally, find someone who wants to build a relationship. They should be invested in your success and willing to work with you. One of the biggest advantages of PO financing is that approval often depends on your customer's credit, not just your own, so find a lender who understands this dynamic.

How to Submit an Application That Gets Approved

A complete and organized application is your ticket to getting funded quickly. Lenders need to see a clear picture of the deal to feel confident in backing it. Before you even start filling out forms, make sure you have all your key documents ready to go. This typically includes your customer's official purchase order, the corresponding invoices from your supplier, and basic business information like your EIN. You’ll also likely need to provide some financial statements for your business. Remember, lenders are looking for specific criteria: you must be selling finished goods, and your customer needs to have a solid credit history. When you have everything in order, you can start your application with confidence.

You've Got an Offer! What's Next?

Once you receive a funding offer, take a moment to review it carefully before you sign. This is your chance to make sure the terms work for your business. Pay close attention to the fee structure. PO financing fees typically range from 1% to 6% of the supplier's costs per month, so see how your offer compares. The most important calculation you can do is to confirm that your profit margin on the sale is higher than the cost of the financing. If the deal isn’t profitable after fees, it isn’t the right move. Don’t be afraid to ask questions. A trustworthy lender will be happy to walk you through the details and ensure you feel completely comfortable before moving forward.

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Frequently Asked Questions

Is purchase order financing just another name for a business loan? Not at all. A traditional loan gives you a lump sum of cash that you repay over time with interest, and it creates debt on your balance sheet. Purchase order financing is different—it’s a cash advance specifically to pay your supplier for a confirmed customer order. The financing company pays your supplier directly, and the transaction is settled once your customer pays their invoice. It’s a tool designed to solve a very specific cash flow problem without adding long-term debt.

My business is new and my credit isn't perfect. Can I still get approved? Yes, you absolutely can. This is one of the biggest advantages of purchase order financing. Lenders are typically more interested in the financial strength and credit history of your customer—the company that will ultimately pay the invoice—than they are in your own credit score. As long as you have a valid purchase order from a reliable customer and a trustworthy supplier, you have a strong chance of getting approved.

How fast is the process? I have a deadline with my supplier. The process is designed to be very quick because everyone involved knows that time is critical. Unlike traditional bank loans that can take weeks, you can often get approved for purchase order financing in just a day or two. Once approved, the financing company can pay your supplier almost immediately, allowing you to get production started without any delays and meet your customer's deadline.

Does this work for any type of business or order? Purchase order financing is a specialized tool best suited for businesses that sell tangible, finished products. It’s a great fit for wholesalers, distributors, resellers, and importers. It generally doesn't work for service-based businesses or for orders that involve consignment or custom manufacturing that can't be easily resold. The key is that the lender is funding the creation of a physical product that will be delivered to a creditworthy customer.

What happens after my customer pays the financing company? This is the final and best step in the process. Once your customer receives their goods and pays the invoice directly to the financing company, the transaction is complete. The financing company will deduct their agreed-upon fees from the payment they received. They then immediately send the remaining balance—which is your profit—directly to you.