PO Financing vs Invoice Financing: Which One Does Your Business Actually Need?
PO Financing vs Invoice Financing: What’s the Smart Move for Your Business?
You’ve got a deal on the table—but you're stuck in the middle. Your supplier wants payment up front, and your customer won’t pay until delivery. So what now? Do you fund production with purchase order financing, or wait for delivery and use invoice financing to keep things moving?
They solve different problems. And if you choose the wrong one, you’ll burn time, strain cash flow, and stall deals that should’ve been closed. Here’s how to pick the right tool—and how Financely makes both accessible through our structured credit platform.
PO Financing: Fund Your Supplier—Before the Product Ships
Purchase order financing is for companies with confirmed orders that need to pay their suppliers to fulfill them. Instead of burning cash reserves or turning down growth opportunities, PO financing lets you use your customer’s purchase order to unlock working capital today.
Financely steps in, underwrites the PO, and pays your supplier directly—either via bank transfer, LC, or SBLC. You get the goods produced and shipped, deliver to your customer, and repay the facility once you’re paid.
Invoice Financing: Accelerate Receivables After Delivery
Invoice financing lets you pull forward the cash tied up in outstanding invoices. If your customer has 30, 60, or 90-day payment terms, invoice finance gives you immediate liquidity—usually 70–90% upfront—based on your open receivables.
You’ve done your part. Now you get paid faster, while the lender waits for the customer payment. It’s a clean way to smooth cash flow and avoid taking on long-term debt.
Key Differences: PO vs Invoice Financing
| Feature | Purchase Order Financing | Invoice Financing |
|---|---|---|
| Funding Trigger | Confirmed customer purchase order | Issued invoice after delivery |
| Capital Use | Pays your supplier to fulfill the order | Cash advance for your own use |
| Best For | Importers, manufacturers, large PO contracts | B2B companies, recurring sales, long terms |
| Repayment Source | Customer invoice proceeds | Customer payment on invoice |
| Risk Focus | Supplier performance and delivery risk | Customer credit and payment reliability |
We Don’t Just Match You to Capital—We Structure It
Financely isn’t a broker. We’re a structured finance partner with forward flow agreements already in place with banks and private credit funds. That means faster approvals, better pricing, and fewer dead ends. You send the PO or invoice—we package the facility, underwrite the risk, and get it funded.
We work with real companies: traders handling $2M+ contracts, manufacturers scaling to fulfill $500K orders, and exporters navigating 45-day payment cycles. We know the mechanics—and we know how to get deals across the line.
Need to fund an order or unlock capital tied up in invoices? Financely can structure both purchase order and invoice financing through a single, credible facility. You focus on fulfillment—we handle the funding.
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