Funding for Purchase Orders
100% funding for purchase orders from R250 000 up to R 5 million
Don’t let a lack of upfront capital limit your growth. Secure large orders, fulfill demand, and scale your business with flexible Purchase Order Funding.
New Heights Finance is a finance broker that doesn’t directly provide loans. We partner with various financial institutions to offer you a variety of loan options and help you compare different products. New Heights Finance may earn a commission, which is usually a fixed percentage of the loan amount and can vary depending on the lender.
Fund purchase orders with private lenders
Are You Facing These Business Challenges?
- You’ve landed a substantial purchase order from a creditworthy client, but lack the immediate funds to pay your suppliers for the goods.
- Your existing cash flow is tied up, preventing you from accepting new, larger orders that require significant upfront inventory investment.
- You’re a growing business with immense potential, but traditional bank loans are too slow, require too much collateral, or are simply out of reach.
- You need to bridge the gap between receiving an order and getting paid by your customer, which can often be weeks or even months.
- You’re looking for a non-debt solution that doesn’t impact your balance sheet or dilute your equity.
If any of these resonate with your business, Purchase Order Funding could be the strategic financial solution you’ve been searching for.
If you have a legally binding contract in place with a buyer, the lender will supply an advance to you to ensure your business has the raw materials to fulfill the order. The creditworthiness of the buyer will also be assessed to ensure they won’t default on payment.
The purchase order is used as the guarantee to get purchase order finance. It’s useful for start-up businesses, sole proprieters and small businesses who receive huge orders that can assist them in growing their business.
So many businesses miss out on orders that will change their businesses because they do not have the funds available to fulfill the order. We assist SMME’s with accessing funds needed to pay suppliers in order to fulfil orders by advancing the value of the PO before the customer pays the invoice. Most of our clients receive a term sheet within 48 hours and are paid out within 7 days. Existing clients get paid out sooner. You can make use of purchase order finance more than once.
How to fund purchase orders
Valid PO
All you need, is a genuine binding contract from either government, municipalities or a private companies.
Submit Details
You submit the deal details online, an assessment is undertaken and a proposal submitted to you.
Deal Proceeds
If the proposal is acceptable then an agreement is signed and the transaction takes place.
Benefits of PO Funding
Seize Growth Opportunities
Take on larger contracts and expand your customer base without upfront cash limitations.
Improve Cash Flow
Convert confirmed orders into immediate buying power, freeing up your existing working capital for other operational expenses.
No Collateral Required
The funding is primarily secured by the value of the purchase order and the creditworthiness of your customer, not your fixed assets.
Faster Than Traditional Loans
The approval and funding process is significantly quicker than conventional bank loans, allowing you to act fast on opportunities.
Flexible and Scalable
Funding scales with your sales. The more purchase orders you secure, the more funding becomes available.
Non-Debt Solution
It’s not a loan in the traditional sense, so it doesn’t appear as a liability on your balance sheet, making your business more attractive to other lenders or investors.
Focus on Sales
With the financing handled, you can concentrate on what you do best: selling and growing your business.
Stronger Supplier Relationships
Timely payment to your suppliers, facilitated by PO funding, can strengthen your relationships and potentially secure better terms in the future.
Available to New Businesses
Banks tend to avoid granting loans to new businesses, whereas purchase order funding is much faster and easier to obtain.
Business Growth
Your purchase order funding facility can grow as your business grows. The more stable your puschase orders are, the bigger your line of credit can be.
What is purchase order funding?
Purchase Order Funding is a short-term, asset-backed financing solution designed specifically for businesses that buy finished goods from suppliers to resell to their customers. It provides the capital needed to pay your suppliers for the inventory required to fulfill a confirmed customer purchase order.
Unlike traditional loans, PO funding is not based on your credit score or collateral, but rather on the creditworthiness of your end customer and the profitability of the specific purchase order. It’s a powerful tool that allows you to take on and deliver large orders you might otherwise have to turn down due to working capital constraints.
How funding for purchase orders works
Our Purchase Order Funding process is designed to be straightforward, efficient, and transparent, ensuring you can focus on fulfilling your orders and growing your business.
- You Receive a Confirmed Purchase Order: Your business receives a legally binding purchase order from a creditworthy end customer. This PO details the goods, quantities, and agreed-upon payment terms.
- Apply for Funding: You submit your purchase order to us for assessment. We evaluate the creditworthiness of your end customer and the viability of the transaction.
- Funding Approval: Once approved, we issue a commitment to fund your supplier for the goods. This commitment is based on a percentage of the purchase order value (typically covering the cost of goods from your supplier).
- Supplier Payment: We directly pay your supplier for the goods needed to fulfill the purchase order. This ensures your supplier is paid quickly, allowing them to release the goods.
- Goods Delivered & Invoiced: Your supplier manufactures or dispatches the goods, which are then delivered directly to your end customer. You then invoice your customer for the goods.
- Customer Pays Us: Your customer pays the invoice amount directly to us.
- You Receive Your Profit: Once we receive payment from your customer, we deduct our pre-agreed fee (a small percentage of the invoice value) and remit the remaining profit margin directly to your business.
This seamless process ensures that you bridge the cash flow gap without taking on additional debt or tying up your existing capital.
Why choose PO funding?
- No risk to you.
- Get feedback on your application within 24 – 48 hours.
- Fast payouts within a few days
- No balance sheet required
- No previous trading history
- No Annual Financial Statements needed
- Any credit score
- First deals welcome
Who should consider funding purchase orders?
Purchase Order Funding is ideally suited for:
- Wholesalers & Distributors: Businesses that purchase finished goods for resale.
- Importers & Exporters: Companies dealing with international trade, often facing longer payment cycles and upfront supplier demands.
- Manufacturers: Who outsource parts of their production or need to purchase raw materials for specific orders.
- Government Contractors: Businesses that secure large contracts with government entities but require funding to fulfill them.
- Startups & Growing SMEs: Companies with limited operating history or collateral that have secured significant orders.
- Businesses with Seasonal Demands: Allowing you to stock up during peak periods without impacting regular cash flow.
Important Note: Purchase Order Funding is typically for finished goods. It is generally not suitable for service-based businesses, businesses that manufacture goods from scratch (without pre-purchasing finished components), or businesses with significant returns or cancellation rates.
FAQs
How are tender deals assessed?
The ‘strength’ of the confirmed order is the main criteria. In other words, who has placed the order and is it a valid order from an accredited vendor, that is able to pay for the goods ordered.
How long does it take to get approval?
Responses within 2 working days and 7 working days to facilitate the deal.
Do I need security/collateral?
No security is needed to access purchase order funding – your PO acts as the security.
Do I need a financial track record?
No, we can assist even if this is your first deal.
Can the order be from a 3rd party?
No, the contract to supply has to be from the original client.
Can you assist with government PO finance?
Yes, it is possible to finance state, municipality and regional government orders and private company orders too.
How long must the PO payment terms be?
From 30 days to max 90 days.
Interest Rate?
No interest is charged, there is a profit share. The lender takes the financial risk and will share in the profits with you.
Must the business be BEE?
Anyone can apply. White owned or Black Owned businesses can all apply.
Can international orders be funded?
Yes, if the supplies are coming from overseas then funds can be paid to the overseas supplier.
This is my first order? Can you help?
Yes, you do not need a track record. You need a valid purchase order, to be assisted.
What profit margin must my order have?
The deal needs to have at least a 30 % margin of profit, to be considered viable.
Ready to Turn Your Purchase Orders into Profit? Apply for Funding for Purchase Orders
Don’t let capital constraints hold your business back from its true potential. With Purchase Order Funding from NHFinance, you can confidently accept larger orders, fulfil demand, and accelerate your growth.
For Supply Chain Finance, Trade Funds, Import Finance, Invoice Discounting and Inventory Finance
THE BELOW FORM ONLY APPLIES TO PURCHASE ORDER FUNDING. PLEASE ONLY SUBMIT THE FORM ONCE AND CHECK YOUR INBOX FOR A CONFIRMATION EMAIL.