PO Finance With Receivables Assignment

PO Finance With Receivables Assignment

Fund suppliers against confirmed purchase orders. Repayment comes from the end-buyer receivable assigned to the financier. Clean mechanics. Tight controls. Faster turns.

Prepay Suppliers

Release production and shipment by paying the supplier at or after shipment against PO and shipping evidence.

Cash From Buyer Risk

Advance is anchored to end-buyer credit. Repayment flows from the assigned receivable into a controlled account.

Revolving Capacity

Turn POs into repeatable liquidity. Add purchase limits per buyer, supplier, and SKU with clear covenants.

How It Works

  1. PO + Supplier Contract: End-buyer issues PO to you. You place the supplier order. We run KYC and a buyer credit check.
  2. Funding Trigger: On shipment (or pre-shipment where justified), financier pays the supplier against PO match, supplier invoice, transport docs, and control mechanics.
  3. Assignment & Notice: Your invoice to the buyer is legally assigned to the financier. Buyer receives notice to pay a named controlled account with no set-off.
  4. Repayment & Release: Buyer pays on due date. Financier is repaid from proceeds. Surplus releases to you. Facility revolves for the next cycle.

Eligibility & Required Controls

Minimums & Tenor

Typical PO size USD 250k+. Tenor 30–150 days from shipment. Higher volumes allow tighter pricing and broader limits.

Buyer Credit

Named buyers with measurable credit. Public or privately-rated. Buyer acknowledgement preferred where law allows.

Title & Evidence

Commercial invoice, packing list, B/L or AWB, inspection where needed, cargo insurance with loss-payee endorsement.

Proceeds Control

Assignment of receivable, no-set-off notice to buyer, controlled collection account, and step-in rights.

Structures & Variants

  • Post-Shipment Advance: Supplier paid at shipment against transport docs and PO match.
  • Pre-Shipment Tranche: Limited pre-shipment draw for inputs, tied to production milestones and inspection.
  • Credit-Insured AR: Non-recourse or limited recourse purchase where trade credit insurance is available and assignable.
  • Approved Payables Route: Use buyer approval on invoices to create a discountable payable undertaking.
  • Revolving Borrowing Base: Multiple buyers and POs under a single facility with concentration limits and eligibility criteria.

Advance Rates, Pricing, Tenor

Advance

70–90% of supplier invoice at shipment or 80–95% of eligible AR, subject to buyer credit and controls.

Pricing

Margin per 30 days or per annum plus transaction fees. Better pricing with stronger buyers and clean jurisdictions.

Tenor

30–150 days typical from shipment. Extensions subject to buyer performance and covenant compliance.

Initial Documents

  • Company KYC pack and corporate docs
  • Financial statements and AR aging
  • Buyer list with concentration by value
  • Executed PO and sales contract
  • Supplier proforma and contract
  • Shipping plan and Incoterms
  • Cargo insurance schedule
  • Inspection protocol where applicable
  • Draft assignment and notice templates
  • Warehouse or logistics setup if needed

Key Risks & Mitigants

Buyer default: Trade credit insurance where available, limits per buyer, acknowledgment of assignment.

Performance risk: Shipment evidence, inspections, QC certificates, and step-in remedies.

Title slippage: B/L control, pledged warehouse receipts, and controlled delivery instructions.

FX/price moves: FX hedging and commodity hedges matched to PO and AR tenor.

Engagement & Process

Our Role

Financely acts as arranger and advisor through regulated partners. We structure, underwrite, and coordinate insurers, collateral managers, and facility agents.

Retainer & Fees

Engagements start with a retainer between USD 50,000 and USD 200,000 based on scope and jurisdictions. Success fees apply on funded amounts.

  1. Week 1: Intake, buyer map, eligibility screen, indicative terms.
  2. Week 2: Retainer, data room, credit and legal due diligence, draft controls.
  3. Week 3: Insurance and logistics confirmations, facility docs, assignment and notices.
  4. Week 4: First draw against shipment. Revolving cycle begins.

FAQs

Do we need buyer consent?

Legal assignment with buyer notice is the standard. Some jurisdictions require buyer acknowledgment before payment redirection.

Can this work without trade credit insurance?

Yes where buyer credit is strong and controls are tight. Pricing and advance rates improve when insurance is in place and assignable.

Which goods are eligible?

Goods with clear title transfer and traceability. Commodities, industrials, and finished goods with verifiable flows perform best.

What happens if the buyer pays late?

Cure period applies under the facility. Late charges may accrue. Extensions depend on buyer standing and covenant performance.

Can we include multiple buyers and suppliers?

Yes through a borrowing base with limits per counterparty and eligibility rules per invoice and SKU.

Ready to unlock supplier prepayment on confirmed POs?

Share your buyer list and typical PO sizes. We will revert with indicative terms and a closing plan.

Request A Quote

All engagements are subject to KYC/AML, credit approval, final documentation, and enforceable assignment mechanics. Financely acts as arranger and advisor through regulated partners. We are not a bank. No guarantees of funding.

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