 | You need expertise to handle the financing |
| You need additional working capital |
| You need a quick response to an immediate sales need |
| You don’t want to incur additional credit risk, be it foreign or domestic |
| You want your buyers and sellers to not know each other |
| You want the opportunity to make additional profit |
J&D Financial understands all the above reasons and will work with you
to fulfill your needs.
They finance purchase orders for all types of transactions that include:
- U.S. Supplier to U.S. Buyer
- U.S. Supplier to Foreign Buyer
- Foreign Supplier to U.S. Buyer
- Foreign Supplier to Foreign Buyer
Every purchase order transaction stands on its own. They look at your
business history, the credit worthiness of the buyer, the ability of your
supplier to produce the goods, and if the transaction is profitable for
all parties.
Business History
They consider funding those organizations with a track record of producing
goods. Your company may be young or a start-up, but your company
management must have a proven track record to produce the goods.
Buyers Purchase Order
Your buying firm must be reputable with a good credit line. The purchase
order must be verifiable.
Suppliers
Your suppliers must know your product and be able to produce it in time
and to meet your buyer’s terms. The supplier must be a firm with a good
business history and track record of producing goods.
Profitability
The transaction after all expenses must make a profit for all parties.
Payment of the money lent to support the transaction can come from any
number of sources such as factored receivables.
Purchase Order Financing is available only to qualified customers. P.O.
Financing falls into two types:
| Finished Goods |
| Non-Finished Goods |
Finished Goods refers to transactions where the goods are never touched
by you. Usually these goods go directly from your supplier to your buyer.
You never take direct possession.
Non-Finished Goods are when you the seller take possession of the goods
either in a raw state (such as yarn to make blue jeans) or a semi finished
state (partially sewn blue jeans). In either case you must take possession
of the product.
Finished Goods are easier to finance than Non-Finished Goods. J&D
Financial will need
to assess your ability to complete the transaction in processing the goods
for the final shipment to your buyer. J&D Financial Corporation finances
both Finished and Non-Finished purchase order financing.
In order to consider P.O. Financing for your firm they will need:
| Completed P.O. Application Form |
| Your invoice to buyer |
| Your supplier’s invoice |
| Your purchase order to your supplier |
| Profit on transaction - gross margins >18% - see work sheet |
| Business History |
| P&L (most recent) |
| Balance Sheet (most recent) |
| Time frame to produce goods |
| Credit information on your buyer |
| Supplier Information |
| Finished Goods or Non-Finished Goods. |
Generally they charge 5% (sometimes more, sometimes less) one time fee
for purchase order financing on the gross amount to be paid by the buyer.
Sometimes there may be an additional interest charge on the money advanced
if the purchase order takes greater than 30 days to complete. Every
purchase order pricing is individual and unique. This purchase order fee
does not include the factoring fee which may cost an additional 3% to 6%
if you are factoring the receivable. (Want to know more about Factoring
Fees? Click here) J&D will consider financing a purchase order transaction
to be paid out by another factor or lender. In order to see if the
transaction will make money for both parties, please fill out the
worksheet section of the application form. As you can see the total cost
of purchase order financing fee and factoring fee can range from 8 to 11%.
Since both parties need to make money, the gross margin should be greater
than 18%.
