Pay your suppliers faster with Worthy Lending’s Purchase Order Financing.
If a business is in growth mode or receiving unusually large orders from its B2B customers, it will most likely be lacking in cash to pay their suppliers for the increased volume of products they are selling. Worthy Lending offers a financial product that will help the borrower to fulfill its Purchase Orders (PO’s). This is accomplished by Worthy Lending promptly paying for the products followed by the supplier (or the borrower) delivering the same to its customer/account debtor.
How it works
Worthy Lending will ask its borrower to provide the PO in need of financial assistance and will verify it with the customer as to its validity.
In most cases the PO must have language on it indicating that the order is irrevocable (sometimes the irrevocable status has a time limit to ensure a predictable delivery to the customer). Upon Worthy Lending’s payment to the supplier (usually up to 90% of the supplier’s invoice), it will get shipping documents, bills of lading and other such verifications of shipping. Once the product is delivered to the customer (the issuer of the PO), the borrower will then issue its invoice turning this PO finance transaction into an Accounts Receivable Finance. The 70%-80% advance payment will close the PO loan and open an AR Finance loan.
Ultimately the AR loan is paid by the customer that issued the PO.