PO funding and selling services (rather than products)

We have talked a lot about when PO funding can definitely help. Basically, if you re-sell or distribute 3rd party products and you have a purchase order from a great credit worthy company - po funding can help.

But what if you sell products and services? For example, what if you sell high tech equipment along with the installation services to go with it? Can you purchase order finance that?

Maybe...

If - and only if - your contract specifies that you are selling the products and services separately, rather than products and services combined. This is critical. If your contracts hold this distinction, then you should be able to use purchase order funding on the product part of the contract.

Things get even easier if you have the products drop shipped or delivered by a 3rd party company.

And lastly, don't forget that po funding goes hand in hand with factoring your invoices.... Factoring comes into play once everything is delivered, and the funds are used to take out the PO funding component.




Don't forget to check out Marco Terry's articles here.