Frequently Asked Questions

 

What kinds of companies use PO financing?

PO financing is great for all types of businesses: from smaller start-ups with PO’s in hand but without the capital to fulfill orders; to larger, more established businesses with large orders or for when that next big customer sends you a PO. Purchase order funding provides the quick capital you need to buy raw materials, produce product, and ship finished goods.

It’s a great way to expand and grow your company, or to expand your business quickly. By working with C2T you will not have to turn down a profitable PO simply because you lack capital!

What is the biggest potential challenge to purchase order financing?

The single biggest stumbling block is also the reason purchase order funding is possible in the first place…approval is based on the credit, track record and trustworthiness of you, your company and your customer. The financiers are in essence betting on you, your company, your suppliers, and your buyer holding up their end of the bargain.  If anything happens during the PO funding timeline, the financiers who took the financial risk and you loose. So be sure that your trust in your manufacturer and your customer is well founded.

Is purchase order financing right for my business?

Partnering with a purchase order finance company like C2T needs to make good business sense for you and your organization. Consider:

  • Fees and interest rates; the purchase order finance company provides the needed funding and will take a small piece of your profits. The percentage is not much, however it needs to make sense for your company.
  • Underwriting requirements
  • Delivery time, billing schedule and other timeline demands (international transit times can be particularly challenging)
  • With C2T you don’t have to automatically say “no” the next time an order or orders come in that would normally be too big or to many to handle. Consider purchase order financing with Capital 2 Thrive.  Let us help you grow by providing you with ‘short-term capital for your long term success.’

What's the difference between purchase order financing and purchase order funding?

Nothing. Both terms refer to the same mechanisms and processes.

How does Capital 2 Thrive (C2T) make money?

We receive a small percentage of the profit you make on the specific PO being financed. We provide the ‘short-term capital you need for your long term success’. You can think of it this way: When you work with C2T you will have the capital you need to grow your business quickly, and you will still receive on average 94-97% of the profit. However, if you do not have the capital needed to fulfill that big PO or multiple POs, then you may lose that opportunity, meaning you lose all profit. Nobody wants that to happen.

How fast can we obtain PO funding?

It varies, of course, but you can probably expect a preliminary response from us within about 12-24 hours and funding within 10 to 15 business days.  The quicker you supply C2T’s underwriters with the necessary documents and answers to questions, the faster our response.

My business offers a service, not a tangible product. Can I get purchase order financing?

No. Purchase order financing is permissible for hard goods only. However, C2T can offer a wide array of customized financial solutions beyond purchase order funding, so complete the application or give us a call to learn more.

What happens if our product sells well and we need purchase order financing again in the future?

That’s great! You’ll already have an account set up with C2T, so repeating the funding process is easy and could go even faster.

Does the current economy have an effect on your ability to arrange purchase order financing?

No. C2T has the ability to fund PO’s in any economic climate.

Can we use our regular banker for accounts receivable?

We’ve partnered with P2Binvestor, a crowdfunding platform and factoring company that is very flexible, price-competitive, and works with C2T clients who want or need this service. Tell us what you want or need and let our team create the best solution for your growing business.

Can we get the money from you and pay our suppliers ourselves?

No, due to the risk we accept when funding your purchase orders, the only way this is done is via Certified Letters of Credit (international or domestic) or a managed escrow account.

How will C2T determine whether or not to approve a request for purchase order funding?

You simply need to prove that your business is strong, your ownership wants this type of funding, your customer/retailer is strong and the opportunity has the promise of profit. We will look at management expertise, supplier reliability, and repayment plans, however the potential PO transaction itself is the key.

Who Uses C2T?

All types of organizations experiencing any of the following:

  • Rapid sales growth
  • Capital constraints
  • Sales volatility
  • Seasonal sales spikes
  • High development costs
  • Stretched credit
  • New product launches.

Many industries can benefit from PO funding including:

  • Apparel, electronics, housewares, sporting goods, toys/games, furniture, food products, hardware, and industrial goods just to name a few.

Does your company do Purchase Order Financing internationally?

Yes, we work with businesses around the globe.

How long has C2T been in business?

This website is the newest addition to the structured finance firm founded in 2013, which develops and implements a wide variety of financial strategies for clients with capital challenges.

Purchase Order Finance Glossary

Letter of Credit
A bank commitment on behalf of a client, to pay a beneficiary a stated amount of money under specified conditions

 

Invoice Factoring
The sale of accounts receivable invoices at a discount for immediate cash

 

Purchase Order
Official document or form prepared by a buyer or retailer for the purpose to purchase goods or services

 

Purchase Order Financing
Short term financing method to allow a corporation to purchase raw materials or finished goods quickly

 

Rapid Sales Growth
Surging sales growth outpaces available working capital and credit

 

Capital Constraints
Lack of working capital making it difficult to fund inventory production to fulfill contracts and purchase orders

 

Sales Opportunities or Sales Volatility
Unforeseen large sales opportunities that develop quickly and exceed available working capital