Purchase order financing: pay your supplier now and fill the order your customer already placed.
Purchase order financing pays your supplier so you can fill a large order from a creditworthy customer. When the goods are delivered and invoiced, the invoice is factored and that pays back the PO funding. At 1st Commercial Credit, PO financing is for companies that already factor their receivables there.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 29, 2026
- Since 20021st Commercial Credit
- 3,800+clients funded
- $5B+funded
- Direct fundernot a broker
- Every costin writing before you sign
1st Commercial Credit figures from its website, read October 29, 2026.
How purchase order financing works with factoring
The three types of PO financing at 1st Commercial Credit
Finished goods
The most common. The product arrives finished and packaged. U.S. importers use it to pay overseas suppliers, freight and import duties.
Light assembly
The goods need some assembly at your place before they're finished. It's higher risk, so it asks for a good track record and consistent delivery with those items. It can include labor and import duties.
Production finance
Raw materials, logistics, import fees and labor. Only for existing factoring clients with 2 years in business, a sales history with those items, financially stable suppliers, and rent, taxes and payroll taxes up to date.
Cost: 1st Commercial Credit publishes PO financing rates from 1.5% to 5% per 30 days, depending on the deal's risk, the type of product and how long the order cycle takes. The factoring of the invoice has its own fee: rates from 0.69% to 1.59%, depending on your volume, how fast your customers pay and their credit, and its average client pays about 2.25%, depending on how many days the invoices take to be paid.
Sources: 1st Commercial Credit's purchase order financing page, its PO financing FAQ and its invoice factoring page, read October 29, 2026. Terms are confirmed in writing before you sign.
What gets looked at, from the credit side
- Your customer: a creditworthy company that issued a real purchase order. Its payment is what repays everything.
- Your supplier: it has to deliver what was ordered, on time.
- Your track record: 1st Commercial Credit funds U.S. companies with a proven history in their industry.
- That you already factor: it's a requirement to apply for its PO program.
A purchase order is only as good as the customer behind it and the supplier delivering it. If either one fails, the invoice never exists, and that invoice is what repays the PO funding. When an order doesn't fit the standard program, 1st Commercial Credit builds custom structures or offers short-term transactional funding instead.
When PO financing is not the right tool
- You sell services, not goods. PO financing pays suppliers for products, although for janitorial, staffing and security contracts 1st Commercial Credit may fund job orders to cover payroll until the work is done.
- You don't factor your receivables. At 1st Commercial Credit, that comes first.
- It's a brand-new product with no sales history. Production finance asks for a track record with those items.
- The order is already delivered. Then it's simply invoice factoring.
Questions owners ask me about PO financing
What's the difference between PO financing and factoring?
Timing. PO financing pays your supplier before the order ships. Factoring advances cash on the invoice after you deliver. They're often used together, one after the other.
Can it pay an overseas supplier?
Yes. Finished goods PO financing is used by U.S. importers to pay overseas suppliers, freight and import duties. See export and import financing.
Do I need to factor with 1st Commercial Credit?
Yes. The client must already be factoring its receivables there to apply for the PO program.
Who placed the order?
Tell me who your customer is, what you're buying and from whom. I'll tell you if the order can be funded.
Also read: PO financing vs factoring · factoring for manufacturers · factoring for distributors · all financing options