Paragon Financial Group is funding during the COVID-19 crisis.

Financing Your Government Contracts With Purchase Order Financing

Purchase order financing (PO Financing) is an excellent way for businesses to generate the capital necessary to fund government contracts. Government contracts are in hot demand. They provide companies with a business that can be counted on, and that also pays well. Businesses normally don’t have to worry about a check from the government bouncing or not getting paid. Consequently, businesses go after these contracts hard, hoping to secure the business of the government. The problem is that these jobs are pretty costly to fulfill and can subsequently, put much strain on a businesses’ cash flow. Purchase order financing is one way for them to get the money they need.

PO Financing: Funding Government Contracts

Financing Your Government Contracts With Purchase Order Financing

Historically, bank financing has been one of the primary ways that companies use to raise the money they need to cover the expenses of their government contracts. However, this was not always possible for every business. Newer companies may not have been able to qualify, and neither might those with bad credit. Today, it is tough for all companies to secure a loan, regardless of their credit history or the length of time in business. One option for those looking to generate cash is to purchase order financing.

Using Purchase Order Financing to Improve Cash Flow

PO financing is a method of generating capital that would be ideal for those with government contracts. To fulfill a government contract, it is often necessary to buy materials or products. If a company does not have the money on hand to do so, then they can not complete the job. That is where the financing mentioned above comes into place

Purchase order financing occurs when a company sells its purchase orders (orders for materials, finished goods, etc.) to a business known as a Factor. The Factor will make arrangements with the supplier, which may include buying the supplies or goods with cash or opening up a line of credit with them. The company that needs the products will then be able to receive them. They will repay the Factor after they have completed the government contract. Payment for this service typically involves some profit sharing.

Purchase order financing is an ideal way for businesses to finance government contracts. It makes it possible for companies to immediately generate the cash they need to fulfill their contracts, even if they do not have the money required. Instead of having to turn down the contractor somehow get out of it, they can complete it. This puts them in a good position to receive another contract in the future. The availability of purchase order financing also makes it possible for smaller companies to go after government contracts. Many shy away from them because they fear they don’t have the capital. P.O. financing provides them with the capital they need to compete even with larger, more established companies.

Get your government contracts financed with purchase order financing!

Apply Securely, call 888-400-5931 ext 1 or email us.

Money When Your Business Needs It Most!™

  • Get Cash Today

    Best Factoring CompanyGet the Cash You Need Today

    Just fill out this quick & easy form!

  • This field is for validation purposes and should be left unchanged.
Get Cash Today
  • Quick Contact Form
  • This field is for validation purposes and should be left unchanged.

Back to Top

Best Factoring Company

Get Started Immediately