PMF Bridge the gap between an order and payment
Purchase order financing may help a business pay eligible supplier costs to fulfill a confirmed customer order. It differs from general inventory financing: a finance provider reviews a specific transaction, including the buyer, supplier, goods and expected payment.
PMF's broader funding options include financing through PMF companies such as Aspire Lending, in-house syndicated deals using PMF capital, and brokered financing. The funding source and structure depend on the program and transaction. A review does not establish which funding source will be available for a particular purchase order.
How purchase order financing works
- Document the order. Provide the customer purchase order, supplier quote, delivery requirements and payment terms.
- Review the transaction. The provider assesses the buyer, supplier, margin and ability to fulfill the order. Additional business or owner information may be required.
- Compare the offer. Confirm the eligible costs, any contribution from your business, fees, supplier-payment method and settlement arrangements.
- Fulfill the order. An approved provider may pay the supplier directly or use another agreed method. Your business remains responsible for its contractual performance.
- Settle the transaction. Customer-payment instructions and repayment follow the agreement. Ask what changes if payment is late, goods are disputed or the order is canceled.
Which businesses and orders may qualify?
A distributor or wholesaler supplying goods to a business customer may be a candidate when the order is verifiable, the supplier can perform and enough margin remains after all costs. Manufacturing, importing and other arrangements require provider-specific review. A shop buying stock without confirmed customer orders may need a different structure.
Information to prepare
- Customer purchase order and supplier quote.
- Delivery schedule, acceptance conditions and customer payment terms.
- Shipping, duties, production and other fulfillment costs.
- Expected transaction margin and the effect of delays or returns.
- Existing liens, other financing and any documents the provider requests.
Compare the full transaction cost
Ask what amount a fee is based on, how it accrues over time and whether extensions, verification, wire or other charges apply. Compare projected proceeds after supplier costs, fulfillment costs and financing charges. A published percentage alone does not explain the total cost.
Financing is not risk-free. Understand your obligations if a supplier does not perform, the customer disputes goods or payment arrives late. Ask about guarantees, liens, minimum charges and compatibility with existing financing.
Purchase order financing, factoring or a credit line?
- Invoice factoring addresses eligible unpaid B2B invoices after a sale.
- A business line of credit may support recurring needs when an approved credit facility fits the business.
- Working capital options may suit inventory or operating needs that are not tied to an eligible order.
Retailers and online sellers can also review our retail business funding guide.
Questions to ask before signing
Who provides the funds? Who receives customer payments? What is my contribution? Which charges change if payment is late? What happens if the order changes? Are guarantees or liens required? Get answers in the proposed terms before proceeding.
For general supplier-payment mechanics and risks, see eCapital's purchase order financing guide. Its examples do not establish PMF program availability or terms.
Approval, amounts, pricing, fees and timing depend on the program, financing provider and application.