Purchase Order Financing a Work In Process

STAR Funding provides financing for Work-In-Process, or WIP Funding.  If the client has purchase orders from a credit approved customer, and STAR can get comfortable with the manufacturing process, we will consider funding a more complex supply chain. When PO Financing a Work In Process the client is not buying a finished product. He is instead buying various components, and either sending them to a manufacturer for assembly, or assembling the product himself. In either case STAR can buy the components and have them shipped to the manufacturer.

Work In Process Purchase Order Financing

Whether the client or an unrelated company is the manufacturer, STAR will evaluate the ability of the manufacturer to produce a product in the right quantities, quality and in the right time-frame. This is a hands-on and extremely risky manufacturing process. Since STAR chances losing 100% of its Purchase Order Finance investment if the product is never completed, or not completed in the right time frame, or is not of the right quality.

STAR uses the same financial and logistical framework for Work-In-Process financing as it does for Finished Goods. However, it is the manufacturing background of STAR’S principals that gives it the confidence to evaluate the production cycle and the ability of the manufacturer to produce the right product in a timely fashion. This is important considering that we are relying on the successful delivery of products in order to get paid through the resulting AR Financing.

What else is required for Purchase Order Financing a Work In Process?

The client is required to have an accounts receivable factoring company that will take out STAR when the goods ship. Preferably a Non-Recourse accounts receivable factoring facility so we know the accounts are credit approved. In some cases we will also handle the factoring in house. This streamlines the purchase order financing process and avoids lengthy intercreditor agreements.

How Does Purchase Order Financing Work?

Purchase Order Financing is quite simple. Star Funding or another PO Financing Lender will help you cover the costs of producing or acquiring goods for resale. Once you receive your purchase order from a credit worthy end customer, Star Funding will assist in purchasing those goods from your vendor. To learn more about the basics of Purchase Order Financing HERE.

Do I qualify for Purchase Order Financing a Work In Process?

If you are in need of capital to fill a large purchase order, WIP Purchase Order Financing is available to you. You can apply HERE or give us a call for more information. When looking to secure Purchase Order Financing please have a copy of your PO and our production schedule readily available for review. This helps STAR get through the review process quickly.

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