Purchase Order Finance: Secure the Stock You Need to Fulfil Large Orders
Winning a big contract is exciting, but finding the upfront cash to pay suppliers can be difficult. Purchase order finance gives your business the funding to cover supplier costs, so you can deliver orders on time and keep your clients happy.
This short-term funding option bridges the gap between receiving a purchase order and getting paid by your customer.
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How Purchase Order Finance with British Business Funding Works
Purchase order finance works by using a confirmed customer order as the basis for funding. Instead of paying suppliers upfront out of your own cash flow, the finance provider covers the cost of goods, and you repay them once your customer has paid their invoice.
What this means step by step:
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You receive a confirmed order from a customer.
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The lender pays your supplier directly for the goods.
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Your customer receives the finished product.
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When your client pays their invoice, the lender deducts their fees and you keep the balance.
Benefits of Purchase Order Finance
Take on larger orders with confidence.
Protect working capital by avoiding upfront supplier payments.
Improve supplier relationships with fast, guaranteed payment.
Scalable funding – the bigger the order, the more funding available.
Why Choose Purchase Order Finance Over Other Business Loans?
Instead of borrowing a lump sum, purchase order finance is directly linked to specific customer orders. This makes it a targeted and flexible way to fund growth.
At British Business Funding, we make business loans simple and fast. With a quick 5-minute application process, decisions in as little as an hour and funds available within 48 hours of approval, we’re here to keep your business moving forward without unnecessary delays.
What are the alternatives to purchase order finance?
Funding via
Business loans
Funding (No PGs) via
Invoice Finance
Funding via
Business Credit Cards
Funding via
Revolving Credit
Funding via
Trade Finance
Commonly Asked Questions About Purchase Order Finance
What is purchase order finance and how does it work?
Purchase order finance is a short-term funding solution that helps businesses pay suppliers when they have a confirmed customer order but do not have the available cash to fulfil it. The finance provider typically pays the supplier directly, allowing the goods to be produced or supplied. Once your customer receives the order and pays their invoice, the finance provider deducts the agreed costs and the remaining balance is paid to your business.
How much can I borrow with purchase order finance?
British Business Funding can help eligible UK businesses explore purchase order finance from £10,000 up to £750,000. The amount available will depend on factors including the size of the purchase order, the supplier costs, the strength of the end customer and the circumstances of your business.
Do I need a confirmed purchase order to apply for purchase order finance?
Yes, purchase order finance is normally based around a confirmed order from a customer. The lender will assess the purchase order alongside your supplier, the customer placing the order and the overall transaction before deciding whether funding can be provided.
What types of businesses can use purchase order finance?
Purchase order finance can be particularly useful for wholesalers, distributors, manufacturers, importers and other businesses that need to purchase goods or materials before receiving payment from their customers. It is often used when a business wins a large order that would otherwise put pressure on its existing cash flow.
What is the difference between purchase order finance and invoice finance?
The main difference is when the funding is provided. Purchase order finance is used before an order has been fulfilled, helping your business cover supplier or production costs. Invoice finance is used after goods or services have been supplied and an invoice has been raised, allowing the business to access money tied up in unpaid invoices. In some situations, the two types of finance can also work alongside each other to support different stages of the sales cycle.