Drive business growth by improving cash flow

Grow your business with Capital 2 Thrive: the best in purchase order financing.C2T provides purchase order financing to companies in a broad range of industries throughout the United States. Purchase order financing gives companies a short-term solution for funding inventory required to complete sales transactions. Our PO financing programs are ideal for companies where growth outpaces available working capital, seasonal sales spikes strain cash flow, or funding from existing funding sources or trade credit is insufficient. We also work in tandem with factoring organizations for spot factoring when you want or need to improve you cash flow or keep your working capital and cash reserves. If you want to keep your working capital and cash reserves or when your company lands that giant PO or multiple POs, or when seasonal influx of business happens, and your organization does not have access to the capital needed to make it happen – you should consider our purchase order financing solutions at C2T.

 

 

All businesses should understand the basics of purchase order (PO) financing, its potential benefits and challenges, and who can and should use it. Simply put, PO financing is a way to produce or purchase finished goods or raw materials that will be turned into products that are resold and shipped to an end customer usually within a relatively short time frame—30, 60, 90 or 120 days. It is based on having strong verifiable purchase orders. Typically, the financing is issued, the products are manufactured and the funding is repaid in less than 2 or 3 months.

Purchase order financing is a short-term funding option that allows businesses to pay their suppliers upfront without exhausting their cash reserves. With this finance alternative companies can fulfill their customer orders without having to turn down business due to a lack of cash. Companies that have clients with a strong credit history are more likely to receive purchase order financing than those with clients who have a challenged credit history.

For instance, Company XYZ has a large purchase order from a national retailer. However, Company XYZ does not have the financial backing to handle such a large order, which could also significantly increase the company’s revenue. Instead of informing the retailer of its inability to handle the order, Company XYZ can find other finance options to fund the order. One of these options is purchase order financing with Capital 2 Thrive (C2T). With this option the purchase order financing company C2T would enter into an agreement with Company XYZ to provide them with the funds to cover the expenses of the manufacturing etc. There are two ways in which this can be done.

  1. The purchase order financing company C2T may agree to pay the supplier directly for Company XYZ’s order.
  2. The purchase order financing company C2T can open up a line of credit with Company XYZ’s supplier.

Through either of these steps Company XYZ will receive its supplies to fulfill the order for the national retailer. Sometimes, a supplier wants payment upfront while your customer can’t pay for 30, 60, 90 even 120 days. Meanwhile, production, labor, packaging and shipping costs all have to be met. Our purchase order finance solutions exists to make your deals not only possible, but profitable.

Example 1

Invoice amount $1,000,000
PO Amount $500,000
Margin 50%
Term Of PO Financing 2 months
Rate 3% per month
Estimated PO Gross Profit Using PO Financing $470,000

Example 2

Invoice amount $500,000
PO Amount $250,000
Margin 50%
Term Of PO Financing 3 months
Rate 4% per month
Estimated PO Gross Profit $220,000

Example 3

Invoice amount $50,000
PO Amount $25,000
Margin 50%
Term Of PO Financing 3 months
Rate 6% per month
Estimated PO Gross Profit $20,500

Who uses it and why?

Purchase order funding is designed for growing businesses with less than optimal access to working capital and or organizations that have challenging cash flow at times. The types of businesses that generally use PO financing are product manufacturers, distributors, wholesaler or reseller of manufactured products.

Targeted purchase order financing services

We can help you:

  • Fund 100% of the cost of production of the PO
  • Solve cash flow problems
  • Find an alternative to over advances
  • Keep working capital and cash reserves in your company
  • Pay your suppliers or give them payment guarantees
  • Take on bigger orders or more orders helping you grow
  • Obtain transactional PO limits of $5,000 to $2,000,000+

How it Works

1. You receive a large purchase order from your client
2. We verify the purchase order and issue a letter of credit to pay your supplier
3. Your manufacturer makes and ships the goods
4. The finished order is delivered to your client who remits payment to C2T
5. We remit your profit to you