“PURCHASE
ORDER FINANCING
AND
PURCHASE ORDER FACTORING FROM PRAXIS”
Purchase order financing, or purchase order factoring, is short term funding used by a borrower to finance the fulfillment of a sales contract with a creditworthy end-customer. The terms of the purchase order financing agreement are very specific, requiring the borrower to use loan funds for the purchase of certain materials and/or services needed to deliver goods to the end-customer. For instance, a clothing manufacturer might use purchase order factoring to purchase fabric needed to construct garments ordered by a reputable department store chain.
