Purchase Order Finance

All business are different whether small, medium or large. Equally, each business has different liquidity needs.

Our diverse and synergistic businesses provide a broad perspective on market opportunities.

In many cases, our clients might have various customer orders and need capital to produce or manufacture the order. For these scenarios, Kronos Capital can help by providing purchase order financing.

Kronos Capital purchase order financing is intrinsically similar to our factoring facilities with the exception that the funding is used to finance prospective activities in your value chain such as shipping and manufacturing. Purchase order financing finances obligations between the client and their manufacturer or supplier, not the client and their buyer.

Every purchase order financing deal requires three parties:

  • Seller/Distributor – Our client
  • Buyer – Will purchase our client's product using a verified purchase order
  • Manufacturer – Will make and deliver the various products to client for later re-sale

A traditional purchase order finance deal has the following components:

  1. Buyer agrees to purchase product from Client evidenced by contract. No products have been delivered.
  2. Manufacturer will make the product, however requires payment up-front or a letter of credit.
  3. Client presents Kronos Capital a verified purchase order from Buyer.
  4. Kronos Capital completes credit due diligence and provides funding to manufacture the product.
  5. Manufacturer promptly product to Client.
  6. Client promptly delivers product to Buyer.