Which funding products does this apply to?

Working Capital, Business Line of Credit, Invoice Financing, Asset-Based Lending. Each has its own page listing the funders in this directory that offer it and what each one publishes about its terms.

Is this specific to construction?

It is written around how a construction business actually generates and collects cash, which is what makes its funding problem different. The mechanics transfer; the arithmetic may not.

The Find Me Funders research desk. Some drafting is AI-assisted, and every page that is says so at the top, including whether a person has checked its claims yet.

How do I know a figure here is right?

Where a page carries the green notice, its claims were checked against the sources listed at the end and a reviewer is named. Where it carries the amber one, nobody has verified it yet and you should confirm anything you plan to act on.

Are the examples real deals?

No. Every worked example is labelled illustrative and exists to show the arithmetic. What any particular lender charges is on that lender's page, where it publishes it.

Why do you never say what a typical rate is?

Because we cannot source it. A market average assembled from lenders who do not publish prices is a guess with a decimal point on it. Where a lender publishes a figure, we show that figure and say where it came from.

Is this financial or legal advice?

No. It is general information about how these products work. Outcomes depend on your contract and your state, and a lawyer or accountant licensed where you are is the person to ask about your situation.

Can I reuse this content?

Quote a paragraph with a link back. Do not republish whole articles.

You have a purchase order you cannot fund. What are the options?

Six routes, one margin test that rules most of them out, and the three risks that decide whether the order is worth taking at all.

By Find Me Funders research desk Updated 14 September 2026 938 words 4 min read

Drafted with AI assistance. Not yet independently checked. Nobody has verified the claims on this page against a source, so treat the figures and legal points as a starting point rather than as settled, and confirm anything you are about to act on. How we check things.

I have a purchase order I cannot afford to fulfil. What are my options?

The options are a customer deposit, supplier terms, a partial first shipment, a line of credit, purchase order finance, or declining the order — and the choice is decided by gross margin. On an illustrative 310,000 order at 30 per cent margin, PO finance plus a factoring take-out costs around 22,475, leaving 70,525; at 15 per cent margin the same costs leave 20,538, and below roughly 9 per cent gross margin the financing consumes the entire profit. Run that arithmetic before you accept, and check the three risks that kill these deals: a cancellable order, partial shipment, and customer setoff.

Start with the cheapest sources and work down, because the order of asking matters and most owners start at the expensive end.

The six routes, cheapest first

1. A deposit from the customer.Costs nothing but a conversation. Customers placing an unusually large order with a smaller supplier often expect to be asked, and a 30 per cent deposit changes the problem entirely. Ask before you tell them you need financing; the sequence affects the answer.

2. Extended terms from your supplier.Also free. A supplier who wants the volume may give 60 or 90 days, or agree to be paid on shipment of the finished goods. Suppliers frequently extend terms they will not discuss on price.

3. A partial shipment.Deliver in two tranches and fund the second from the first payment. Halves the exposure and the financing requirement. Some customers refuse; many do not mind.

4. A line of credit you already have.If availability exists, this is almost always the cheapest funded option.

5. Purchase order financing.The funder pays your supplier directly for finished goods against a confirmed order from a creditworthy customer. Expensive, specific, and available where nothing else is.

6. Decline it.A genuine option, and the right one more often than it is chosen.

The margin test

Illustrative only —a 310,000 order, financed by a PO facility priced at 3 per cent per 30 days on the amount advanced to the supplier, with the resulting invoice factored at 2 per cent as the take-out. Seventy-five days from paying the supplier to being paid.

At 30 per cent gross margin: cost of goods 217,000, margin 93,000. PO finance 16,275, factoring 6,200. Net 70,525, or 22.8 per cent of revenue. Comfortably worth doing.

At 22 per cent: margin 68,200, financing 24,335. Net 43,865, 14.1 per cent of revenue. Still worth doing.

At 15 per cent: margin 46,500, financing 25,963. Net 20,538, 6.6 per cent of revenue. Thin, and any slip eliminates it.

At 12 per cent: margin 37,200, financing 26,660. Net 10,540, 3.4 per cent. You are working for the funder.

The break-even on these assumptions is about 8.9 per cent gross margin. Below that the financing consumes the entire profit and you are taking manufacturing, delivery and credit risk for nothing.

Run this with your own numbers before you accept the order, not after. The most expensive version of this mistake is accepting a large order at your normal margin and discovering that your normal margin assumed you were not paying for the working capital.

What a PO funder requires

They are underwriting your customer and your supplier more than they are underwriting you:

A non-cancellable purchase order from a creditworthy commercial or government buyer. Consumer orders and cancellable orders do not qualify.
Finished goods. Most PO funders will not fund raw materials, labour or work in progress. If you manufacture, that rules out much of your cost base, and a work-in-progress facility is a different and harder conversation.
A verified supplier who will accept payment direct from the funder, often by letter of credit or documentary payment.
A take-out. The funder needs to know how they get repaid: usually by factoring the invoice once delivery is accepted. Both facilities are arranged together and both are priced.
Clear title. An existing blanket lien on your inventory and receivables has to be subordinated or carved out. If you already have a UCC-1 filed against all assets, that conversation happens before anything funds, and the existing lienholder can refuse.

The three risks that kill these deals

Partial shipment.You ship 85 per cent of the order because a component was short. The customer may be entitled to reject the whole delivery, and the funder is owed in full regardless. Confirm in writing what happens on a partial shipment before you commit.

Setoff.If your customer has a claim against you from a previous order — a credit note, a warranty issue, a shortfall — they can set it off against this invoice. The funder still wants paying. Check whether you have any open disputes with this customer before financing an order from them.

Specification failure.Goods rejected on quality are an unpaid invoice, a funded supplier, and a warehouse full of product made for one buyer. Where the order is large relative to your business, arrange pre-shipment inspection and get the specification signed off in writing.

Before you say yes

Compute gross margin on the actual order, using real landed costs including freight and duty, not your average margin.
Get a quote for the financing, in total dollars, for the expected number of days plus two weeks.
Subtract and express the result as a percentage of revenue. Compare it to what you would earn doing your ordinary work with the same effort.
Ask the customer for a deposit and the supplier for terms. Do both before approaching a funder.
Check your existing loan documents for anti-stacking and additional indebtedness clauses.
Confirm in writing: cancellation rights, partial shipment treatment, inspection and acceptance terms, and payment timing.
Decide what happens if the customer pays late. At 3 per cent per 30 days, a 45-day delay on a 217,000 advance is roughly another 9,765 — enough to erase the margin on a thin order.

Declining a large order that does not carry the margin to pay for its own financing is a commercial decision, not a failure. Accepting one and funding it from a facility priced for a different risk is how a profitable quarter becomes a bad year.

Where this applies