PO financing enables businesses to meet their clients’ orders even if money is tight. PO factoring companies progress the supplier-costs to your goods your customer has ordered. In this guide, we take a look at the very best PO financing firms: King Trade Capital, PurchaseOrderFinancing.com, and Paragon Financial. We are going to compare each provider’s PO financing charges, terms, and qualifications.

To qualify for PO financing you’ll need at least $50K in qualified purchase orders each month. If you’ve got less than this, or only require a short term financing solution, contemplate OnDeck. They could finance up to $500K as fast as 1 business day.

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Best PO Financing Company: King Trade Capital

King Trade Capital is the most significant PO financing provider in the U.S., and they have the lowest minimum financing requirement we’ve found in the industry, at $50K a month. They are perfect for you in the event that you have quick paying clients, charging you a flat 3.5percent of the amount they pay your suppliers for the initial 30 days.

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Greatest PO Financing Provider Comparison

	King Trade Capital	PurchaseOrderFinancing	Paragon Financial
Amount Financed Learn More	$50K – $20 Million (100% of cost of goods)	$500K – $25 Million (Up to 100% of product prices )	$50K – $3 Million (100% of product costs)
Time for Provider to Be Paid Know More	7-14 Days	7-14 Days	10-14 Days
Price Learn More	3.5% for first 30 days, 1.25% for each 10 days following	3-6%	3-4percent for first 30 days, 1.25% every 30 days after
Qualifications Learn More	B2B or B2G company Sell tangible products Proven management team expertise	B2B or B2G business sell concrete goods Creditworthy providers and clients	B2B or B2G business Sell tangible goods Creditworthy suppliers and clients
Necessary Profit Margin Learn More	15-20percent +	20%+	15%+
Repayment Conditions Learn More	60 Days	30 – 90 Days	60-90 Days
	KingTradeCapital.com	PurchaseOrderFinancing.com	ParagonFinancial.com

Best PO Financing Provider 2017: King Trade Capital

King Trade Capital has finished more purchase order financing deals than anyone else in the USA. They have funded over $1.5 billion in funds since their inception in 1993. King Trade Capital will fund 100 percent of the cost of inventory to fulfill your customer’s purchase order, and they are able to do it for purchase order amounts as low as $50K or as large as $20 million.

The huge budget range for businesses of all sizes is a huge factor as to why we rated them as the best PO financing supplier. King Trade Capital provides a far bigger maximum funding amount than Paragon, and a lower profit margin demand compared to POF. This usually means that they can assist more companies gain access to the purchase order financing they need, rather than just larger companies.

King Trade Capital also puts a huge emphasis on the management group and their industry experience than they do on your balance sheet or your client’s creditworthiness. If your staff has a high level of expertise, then it increases your odds at getting approved even more.

King Trade Capital does business in both the U.S. and in the U.K.. They are familiar with transactions involving overseas providers. If you are searching to get money to foreign providers quickly, then King Trade Capital may be your very best option.

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Greatest PO Factoring Business for Large Orders ($500K+): PurchaseOrderFinancing.com

PurchaseOrderFinancing.com is the best solution for big companies seeking to perform orders of $500K or more. This is the only type of funding which POF does, and their pricing structure is built with the larger bargains in your mind.

Unlike with King Trade or Paragon, With POF you pay a flat fee of this purchase order price, between 3-6%, irrespective of whether your customer pays in 30 or 90 days. This is often desired from large companies because it’s a lot easier to predict what their cost and cash flow will be from performing the transaction.

The biggest disadvantage to PurchaseOrderFinancing.com (POF) is that you’re required to have a minimum of $500k of financing, either in a single order or complete funding per month. This eliminates many companies from being able to consider POF and is much greater than the minimum of $50K set by the King Trade Capital and Paragon Financial.

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Greatest PO Financing Provider for Slow Paying Customers: Paragon Financial

Paragon Financial is a good PO financing provider that offers competitive terms and rates to both King Trade Capital and PurchaseOrderFinancing.com. If you have slow paying customers that normally take more than 60 days to pay off your invoices, then Paragon Financial might be your very best alternative.

They are cheaper than King Trade funds for more paying clients, but they still give you the low funding amount flexibility that POF does not give. Paragon Financial also has a more minimum funding period than either King Trade Capital or POF, typically funding in 10-14 days instead of as quick as seven weeks.

Paragon Financial targets the receivables business, but not only in PO financing. This could be an advantage if you could need multiple financing solutions. Establishing a connection with Paragon via PO Financing may increase your chances of being accepted for other financing afterwards. This is a benefit that POF doesn’t have, and that King Trade Capital does not specialize in.

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Alternatives to PO Financing

The competition in the PO financing industry is reduced, which keeps costs higher and makes it a much less aggressive funding choice compared to alternative choices. If you can’t wait 1-2 weeks for PO Financing, then you may want to try these choices, which can all get your customer’s order financed faster than PO financing for about the Very Same prices:

Invoice Factoring

The largest competitor to PO financing is bill factoring, which can get you funds for your unpaid invoices to pay for the supplies of your new orders. Invoice factoring is a much better match if you are needing cash to fulfill smaller orders on a consistent basis.

PO financing is typically better in case you have one quite large order that you need financing for. If you are searching to get started, we have previously reviewed the best invoice factoring companies.

Accounts Receivable Financing

If you’re a smaller business that bills less than $30K per month, then you won’t be eligible for either factoring or PO funding. Alternatively, you can try accounts receivable funding.

AR funding is similar to factoring because you still get money for your unpaid bills, but AR financing functions more like a credit line than it does a traditional factoring product. To get started, find out that we recommend as the best AR funding providers.

Business Line of Credit

A business line of credit is a fantastic option if you need to fund orders on a non-consistent foundation. Many larger businesses which have a credit line will use it in order to finance one purchase, knowing they’ll be repaid within 60 days. To find out more, read our best company line of credit suppliers.

The Very Best PO Financing Firms: In-Depth Review

Now let’s take a closer look at the best PO financing firms with more detail into the most important terms and conditions of purchase order funding. If you are interested in knowing more about how it functions, you can first read our comprehensive manual to buy order funding.

Loan Amounts

The loan numbers throughout the PO financing industry vary widely, together with suppliers doing deals from $50K to $25 million. King Trade Capital has the maximum flexibility of the 3 choices within this article, funding deals as low as $50K as large as $20 million. All can finance your mid-six figure deals, that’s the bread and butter of PO funding.

Once you’ve reached the minimum sum your PO financing provider requires for the month, they will generally be open to funding the smaller deals for you. They may also be ready to do this if you’ve had a track record of hitting a certain level of funding per month for a while. If you are first beginning with PO financing, however, you have to hit the provider’s minimal.

Funding Time

During the business, you can anticipate the financing process to take between 1-2 weeks. Not one of the suppliers we examined are any different, all falling somewhere between the 7-14 day window. If you have to get financed faster than this, you might want to consider invoice factoring or AR funding as an alternate solution.

PO Financing Rates & Prices

Purchase order financing is not a loan, so there isn’t any interest rate. Each provider charges a certain rate for a fee. This fee is typically a percentage of the total amount of money that they pay your suppliers. For many suppliers, the longer it takes your clients to pay the larger their charges are. That is something to keep in mind when you have a slow provider because the time starts counting as soon as your provider gets paid to fulfill the purchase order.

Consequently, if your provider takes 2 weeks to fulfill the order, that is two months of financing you are paying for until your client ever has an invoice or opportunity to pay for the goods. If you give your clients terms, then you should calculate the likely cost of your financing by combining your supplier’s timetable with the duration of terms you provide your clients.

For instance, employing the provider that takes two weeks to send and combining that with all the 30-day conditions you promised your client puts the financing time framework at about 6 months. Each provider has a different price based on how long it takes for the customer to cover them.

PO Financing Qualifications

The eligibility requirements for purchase order financing providers is very similar, and also to qualify for PO financing you normally need to:

• Be a B2B or B2G company
• Sell concrete goods (no service businesses)
• Have profit margins of 15%on the deal you are financing
• Have creditworthy customers and providers

Each of the providers we’ve reviewed has a slightly different set of qualification requirements, and their approval procedure focus is on different attributes.

Profit Margin Needed Per Deal

One of the most important aspects of obtaining a purchase order funded by a PO financing supplier is making sure that your deal will be rewarding for you. This is largely as a result of PO financing company wanting to ensure you are able to afford to pay their charges without even taking a major hit to your small business. If your margins are less than 15 percent for any single purchase arrangement, then you’re not likely to get approved.

Number of Purchase Order Funded

The industry standard is to finance 100% of their product costs to supply a purchase order. King Trade Capital and Paragon Financial are both typically 100% or nothing suppliers, while PurchaseOrderFinancing.com might finance the majority of the costs for an extremely big purchase. Meaning, they will fund 85-95% of their transaction, but this will not occur very often. Typically, POF will also fund 100% of the product prices of each purchase order they finance.

PO Financing Repayment Terms

With PO financing, you don’t have to make any payments while you await your clients to pay off your bill. The period of time of repayment begins the day your financing provider pays your provider and finishes when the customer has paid for the delivered goods. Each loan supplier has different requirements for how long they expect it to take for the customer to pay them back, and also the normal repayment period is dependent upon the creditworthiness of the providers and clients.

Bottom Line

PO Financing is a fantastic alternative for businesses with substantial dollar amounts of purchase orders, who desire a working capital method to fund the cost of the product necessary to fulfill their client orders. If you’re looking to fund smaller order amounts compared to other funding procedures, like AR financing, might be a much better match.

Our recommended PO financing supplier is King Trade Capital. They have the largest assortment of financing quantities of anyone we have reviewed, which range from $50K to $20 million. They’re the largest PO financing company in the industry, and can generally pay your supplier within 1-2 weeks.

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