How Are Purchase Order Financing Companies Funded?

Most purchase order financing companies are funded by one, some or all of the following:

1. Bank line of credit
2. Hedge funds
3. Owners own capital
4. Investors
5. Larger factoring companies (who invest in a smaller factoring company)

So, like most financial businesses, they reinvest these funds in financing transactions and then make the difference between what they charge and the cost of funds (less expenses, write-offs etc).

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Looking for information on purchase order financing? Read the purchase order finance blog