Purchase order financing, also known as P.O. Financing, is a way for you to take advantage of sudden large orders from existing or new customers regardless of your current cash situation. Using the strength of your orders, TFS helps you purchase product for delivery of pre-sold goods. Purchase order financing is a good solution for manufacturers who outsource the production of their product to a third party vendor, as well as wholesalers and distributors.
TFS offers up to 100% of the cost of goods for a purchase order or contract. Compared to other forms of financing, purchase order financing provides additional capital in excess of what your balance sheet can support.
TFS acquires inventory from the SUPPLIER on behalf of the CLIENT, and immediately re-sells inventory to CLIENT for delivery to pre-qualified ACCOUNT DEBTOR.
The CLIENT delivers the inventory to the ACCOUNT DEBTOR, creating an Accounts Receivable.
TFS purchases Accounts Receivable from the CLIENT at a discount.
The ACCOUNT DEBTOR pays TFS the full amount of the Accounts Receivable. Balance of the unfunded amount is returned to the CLIENT, less fees.