Double Diamond Investment's Purchase Order Financing program is a unique source of funding for your company. Traditional lenders, finance companies, and banks limit their lending against your company assets which already exist (such as accounts receivable, equipment, and inventory). Double Diamond Investment's Purchase Order Financing program creates the asset, by advancing funds directly to your vendor for the purchase of inventory that can be used to fill your backlog of sales orders. How many times have you considered, "If I only had the money to fill this order or take on that project, I could really launch my business?" Through the judicious use of Purchase Order Financing, Double Diamond Investments can make that wish become a reality. Ponder for a moment how your business could benefit from PO Financing and Accounts Receivable Factoring.
Double Diamond Investment's Purchase Order Financing and Accounts Receivable Factoring programs look beyond the financial strength of your balance sheet and focuses on the strength of your customers and your ability to produce or provide a quality product. Purchase Order Financing is almost like having a silent equity partner without giving up ownership of the business. If you have been considering selling part of your business for additional working capital, think again.
At first glance, Purchase Order Financing appears more expensive than other forms of traditional funding. PO financing is a transactional expense associated with specific sales orders that can be used in times of need. The more relevant question is, "What is the cost of NOT FILLING A SALES ORDER due to lack of funding?" If the additional transactional expense of PO financing will result in a profitable sale, the cost is irrelevant because the company will receive additional revenue and profit it would not have otherwise experienced. Often, the expenses of PO financing can be offset by taking advantage of discounts offered by your vendors for prompt payment or paying on COD terms. How much business have you not pursued or worse, have had to turn away due to lack of working capital to fill the orders?
As required by Double Diamond Investments, the contractor has listed his cash needs by week and has identified the vendors that must be paid during that week. He has also listed the milestones or what his company will accomplish that same week to help Double Diamond Investments identify and monitor that contract. Double Diamond Investments will fund the cash needs of the business including payroll as long as the business is meeting the required milestones.
PO financing can include posting letters of credit to your vendors, prepaying vendors for product or service, and issuing payment guarantees (vendor assurance guarantees). Call us today and learn more about Purchase Order Financing.
Please provide a timeline (by week), listing the cash needs and shipment dates of the product you wish to PO Finance. Be sure to include the weekly milestones that will be completed prior to requestion of your next draw request. See the simple example below:
| Order Product From: | Week 1 | Week 2 | Week 3 | Week 4 | Week 5 |
| Newco Steel | 75,000 | ||||
| A-1 Glass and Glazing | 30,000 | ||||
| Ace Hardware | 25,000 | 10,000 | 5,000 | ||
| Labor (payroll) | 25,000 | 35,000 | |||
| Equipment Rental: | |||||
| 40" crane | 10,000 | ||||
| Fork lift | 5,000 | 5,000 | |||
| Sub Contractors | 3,000 | 6,000 | 15,000 | 7,000 | |
| Misc. | 4,000 | 3,000 | |||
| Weekly Cash Needs: | $112,000 | $71,000 | $35,000 | $45,000 | |
| Invoice for shipment | $330,000 |
Summary:
Contract amount.......................................$330,000
Expenses..................$263,000
P.O. Financing Exp......$15,000
Total Exp......................................................$278,000
Profit on the Job........................................$ 52,000
Weekly Milestone
Week 1: Product delivered and machining started.
Week 2: Machining complete. Outsource to vendor for glazing.
Week 3: Glazing complete. Quality control 50% complete...etc.
- Complete Double Diamond Investment's Application.
- Copy of pro forma invoice to your customer.
- Your PO(s) to your vendors/suppliers for product to fill order.
- Any credit information or past history you have with your customer.
- Time sheet to fill order.
- Break down of revenue and expenses to fill order.
- Company P & L Balance Sheet (most recent).
- Is funding for the purchase of finished goods or raw material for manufacturing?
- Are you currently financing or factoring your Accounts Receivable?
- Any tax liens on the business?
- Flexible terms.
- PO Financing advances range between $10,000 and $500,000.
- PO advances can be as high as 75% of the PO or sales order.
- Fees depend on complexity of transaction. Typically between 5-7% of the PO amount.
- Working with your current factor.
- Provide trade financing (letters of credit to your vendors).
- Following delivery of the product to your customer, the PO rate reduces to a lower factoring rate.
- Is a personal guarantee required? Yes.
- Will a UCC filing be recorded by Double Diamond Investments? Yes.
- Client product must be re-saleable (must have multiple buyers).
- Client customer must be credit worthy.
- Total cost of client to complete the order must not exceed 75% of the value of the PO.
- Double Diamond Investments will send payment directly to your vendors for the purchase products.
- Fulfilling the PO must not exceed 60 days.
- Product must be established and proven in the market place for at least 6 months.
- Complete Double Diamond Investment's application with all supporting documentation.
- Three customer references from customers that are currently or previously purchasing the same or similar product.
- List of all suppliers that will be used to complete the order.
- Provide product brochures or marketing information.
- Provide a spread sheet and time line showing the cash needs and vendors to be paid weekly.
- List of shipping dates and invoice amounts being billed.