Purchase Order Financing
Access up to 60% of PO cost, with no collateral needed
Quick approval outcome in 48 hours
Personalized, low-interest rates from 1.5% a month
The simple application process, minimal documentation to apply
Benefits of purchase order financing
Need additional funds to buy inventory & complete customer orders? Increase your cash flow with a short-term purchase order financing loan to get extra funds at attractive, low-interest rates and take your business to the next level.
Advance cash to buy more goods & inventory
Stay competitive & keep up with seasonal demand
Short-term capital injection
Extra firepower to take on big jobs
Does your business offer 30 – 90-day payment terms on invoices?
Find out how your company could monetize invoices for immediate working capital through invoice financing: up to $500k, minimal docs required to apply.
What Is Purchase Order Financing?
Order Financing is a financing product directly provided by the Singapore financing companies.
Purchase Order Financing can use Purchase Order Financing to purchase goods and workforce costing for projects awarded to the borrower. This allows the business to obtain financing without taking a bank loan, and the proceeds can be applied directly to the project.
What Is The Criteria To Apply?
The criteria for applying for the Purchase Order Financing is as follows
Criteria | Requirement |
---|---|
Company Type | Sole Proprietors, LLPs and Private Limited companies are eligible to apply |
Shareholding | No Limitation |
Incorporation Length | No Limitation |
Has an Invoice for Goods or Services been issued? | Yes |
All companies incorporated in Singapore who have a Purchase Order awarded or about to be awarded can apply. The condition for Purchase Order financing is that a PO has to have been issued or is about to be issued & the borrower is waiting for funding before starting the project.
How And Who Do I Apply To?
To apply the following documentation is required, but not limited to
Documentation Type | Required? |
---|---|
6 months company bank statements | Yes |
2 Years Profit Loss and Balance Sheets | Yes |
2 Years Director’s Notice of Assessment (Income Tax) | Yes |
Director’s NRIC | Yes |
Signed Application Form | Yes |
Purchase Order | Yes |
Some Lenders That Offer
Purchase Order Financing Are Below
Purchase Order Financing Are Below
Financial Institutions
CIMB Bank Berhad
DBS Bank Ltd
Maybank Singapore Ltd
Oversea-Chinese Banking Corporation Ltd (OCBC Bank)
RHB Bank Berhad
Standard Chartered Bank
United Overseas Bank Ltd
The banks above can do Purchase Order Financing or a similar financing product.
Also, there is a basket of private lenders who can structure Purchase Order Financing at reasonable rates.
How Much Can I Loan?
Companies can loan up to 50% of the Purchase Order Value or Up to S$1,000,000, whichever is lower.
Should businesses require additional funds aside from Purchase Order Financing, they can apply for the SME Working Capital Loan or the Temporary Bridging Loan, allowing companies to borrow also up to S$1,000,000 and S$5,000,000. This is also useful for businesses seeking additional cash flow or for business expansion.
Collateral might or might not be needed for Purchase Order Financing, and in certain situations, a confirmation that the Purchase Order has been issued might be required.
The financing amount is calculated based on an LTV (Loan-to-Value) on the Purchase Order, which can go up to 50%
The following table illustrates how much funds you can take by Purchase Order Financing.
Purchase Order Value | Loan To Value | You Receive |
---|---|---|
$50,000 | 50% | $25,000 |
$100,000 | 50% | $50,000 |
$200,000 | 50% | $100,000 |
How Long Can I Loan For?
The maximum tenure of the Purchase Order facility depends on the project length of the purchase order, including credit terms given to the client. In specific scenarios, where the project is broken down into different batches, they might repay the funds in distinct groupings.
An example of the repayments is in the table below.
Loan Period | Total Amount | Interest Rate (%)/Month | Repayment Amount |
---|---|---|---|
30 days | $100,000 | 1 | 101,100 |
60 days | $100,000 | 1 | 102,200 |
90 days | $100,000 | 1 | 104,400 |
*monthly repayments might vary and are subject to change
At the end of the payment terms, the company guarantees that their customers pay on time to the specified account. Unlike a Working Capital Loan, Purchase Order Financing is a short-term financing product that requires clients to make payments by the end of their payment terms. Late payment may result in additional costs, and also the funds are meant only to be used for that specific project.
What Are The Interest Rates Like?
Interest Rates depend on the lender but are in the range of 0.5% – 1% per month. The interest rate is much different from the different lenders in the market. We can help you identify the lender with the lowest rate & give a smooth and seamless application.
What Happens If I Decide To Pay Early?
For Purchase Order financing, if the project completes earlier plus you make an early repayment., the interest is calculated to the day that the repayment is made & pro-rated accordingly. Therefore it is always advisable to ensure payment from your customers sooner than later or complete the project as quickly as possible.
What If I Need More Than The Amount Approved?
The amount for the financing depends on the value of the purchase order up to 50%. Companies are only able to apply to one (1) lender for each purchase order. This means that if you finance a Purchase Order lender A, you are incapable of funding it again with lender B
If you need more than S$1,000,000, you can apply for the SME Temporary Bridging Loan (“TBL” ), Working Capital Loan (“WCL”), which goes up to S$5,000,000, or the Business Term Loan offered by banks.
What Happens If I Don’t Qualify?
Didn’t qualify for Purchase Order Financing? Don’t worry! Businesses still have a way to Working Capital and Temporary Bridging Loan and SME Micro Loan for Business loans in Singapore.
Equity Capital Solutions can assist in identifying why your application was not eligible for the WCL and help you again for a successful application.
For more excellent credit amounts up to S$5,000,000, you might want to explore applying for the Temporary Bridging Loan.
Conclusion
In summary, Purchase Order Financing can be a very useful product for businesses seeking to increase their cash flow or for business expansion without taking on an additional business loan. It can be done on an adhoc basis, giving businesses the flexibility to decide when to use such a facility. This is an important financing product for businesses looking to grow with cheaper capital costs and should be considered for every business.
How It Works
Make a Free Enquiry.
- An Equity financing specialist will reach out to you for some simple details.
- We work together with you for the documentation.
- You relax and we do the heavy lifting for you.
- We contact you when its approved for signing down the loan.
Contact Us
About FR Capital
FR Capital is a Singapore consultancy firm that helps SMEs to secure business loans from banks and financial institutions. We concentrate on SME finance, and through our expertise and network, we help clients secure funding with low-interest rates efficiently and hassle-free.