P.O. Financing

Purchase Order Financing or Factoring
Purchase Order Financing, or PO financing, is used to pay your suppliers, laborers, or other intermediaries for goods or services to generate additional sales. A company will need PO financing when:

• You need expertise to handle the financing
• You need additional working capital
• You need a quick response to an immediate sales need
• You don’t want to incur additional credit risk, be it foreign or domestic
• You want your buyers and sellers to not know each other
• You want the opportunity to make additional profit

Vecron Asset Management understands all the above reasons and will work with you to fulfill your purchase order funding needs.

 

P.O. Financing/Factoring - How it works
1. Your buyer gives you a purchase order for goods.
2. You give your supplier your company's purchase order to fulfill the buyer's purchase order. The gross margin between the two purchase orders should be at least 18%.
3. Your supplier ships goods to you (non finished goods) or to your buyer (finished goods). Payment to your supplier is made by Vecron Asset Management immediately or some time in the future subject to the negotiated terms. This is called Purchase Order Financing.
4. If the goods (non finished) were sent to you from the supplier, you finish making the product and ship to your buyer the finished product.
5. You send your invoice for your buyers order to Vecron Asset Management for factoring.
6. Vecron Asset Management factors your invoice to your buyer. We advance you funds against this invoice less any factoring and purchase order financing fees. In this case, the funds are used to make payment to Vecron Asset Management to pay off the amount we paid to your supplier for the purchase order financing plus any purchase order fees for our services.
7. When your buyer pays the invoice per terms we collect our factoring advance and interest charges. Any funds left are forwarded to you.

 

We offer purchase order finance transactions for all types of transactions that include:
1. U.S. Supplier to U.S. Buyer
2. U.S. Supplier to Foreign Buyer
3. Foreign Supplier to U.S. Buyer
4. Foreign Supplier to Foreign Buyer

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 >18% - see work sheet
• Business History
• P&L (most recent)
• Balance Sheet (most recent)
• Time frame to produce goods
• Credit information on your buyer
• Supplier Information
• Finished Goods or Non-Finished Goods.