purchase order finance
Gives you the cash needed to start the work
Normally used by SMEs who are unable to take on large orders from customers due to lack of cash resources needed to make a full, upfront payment on goods
Allows you to receive the funding you need for suppliers, staff and other costs as soon as you receive an order
Bridges the gap between an order being placed and paid for by a supplier and the payment is received by the end customer
Provides a fast, effective short-term cash injection allowing you to pay for goods or raw materials that are needed to fulfill a large order
how does purchase order finance work?
Purchase Order Finance works differently to invoice factoring and discounting, as it is secured against the initial purchase order (PO) from your customers instead of their outstanding invoice. The lender that we pair your business will be centred around the size of the order and their credit score.
This method of finance acts as a huge benefit for growing businesses as it focuses on the customers ability to pay for the completed PO instead of your own businesses finances.
When the order has been delivered and the invoice has been raised, you will repay the amount that you borrowed as well as any transaction fees and interest.
benefits of purchase order finance
Transparent Repayment Terms
Your finance partner will work with you, your customer and your supplier to make sure that affordable repayments are made
We will assess the suitability of each lender to make sure it meets the needs of your business and the industry you are in
If you use purchase order finance to secure stock from suppliers, they'll treat you like a cash buyer instead of having to open an additional line of supplier credit. This will attract better rates for you so you can profit off each other.
What is invoice finance?Invoice finance is a way of raising funds; giving you an immediate injection of cash, which could release up to 95% of the invoice value against your unpaid invoices, by the invoice finance provider agreeing to purchase your book debts.
What is invoice factoring?The factoring company purchases your book debts and will provide a full credit management service. In this service, they will: Talk directly to your customers and send out follow up letters Collect payments Produce monthly statements Allows access up to 95% of the invoice value. The lender will also provide disclosure in the way of an assignment notice placed upon the invoice.
Who are Alliance Commercial Finance Limited and what do they do?Alliance Commercial Finance Limited provide bespoke invoice finance, factoring and specialist supplier finance solutions to help businesses fund their working capital.
Why should I choose Alliance Commercial Finance?We spend the time talking to the directors to establish their requirements and provide them with the best options for their business. This enables a quick and reliable decision, allowing business to progress with as little disruption as possible. We constantly work with our funding partners to make sure we are up to date with current offers and products; which means you get impartial advice and the right product for your requirements. When you work with us, you will benefit from over 20 years' experience in the financial sector. Having worked at director level within the independent, non-bank owned factors, including those owned by merchant banks.
What's the difference between factoring and invoice discounting?With factoring, you will choose the lender who will collect the payment from your customers, this works best for small to medium sized businsses. Your customers know that you're using factoring but the factoring company will handle the credit control directly and will neogiate terms with customers. Invoice discounting is more straightforward and is used by large and established businesses. Compared to factoring, you will still have access to credit control but your customer will be unaware that you are borrowing against their invoices. With invoice discounting you can avoid a third party (the invoice financier), allowing you to deal directly with your customers.