Quick answer
Purchase order financing in Illinois pays your supplier directly — up to 100% of costs — so you can fulfill large confirmed orders you couldn't otherwise afford. It typically costs 1.5%–6% per 30 days and is repaid when your customer pays.
Key takeaways
- PO financing pays suppliers so Illinois companies can accept orders bigger than their cash.
- Works best for finished goods with gross margins of about 15% or more.
- Often paired with AR financing once the goods are delivered and invoiced.
What is PO financing and who uses it in Illinois?
Purchase order financing is short-term trade funding for companies that resell or assemble finished goods. In Illinois, it's most common among distributors, wholesalers, importers, government resellers and private-label brands serving retailers and agencies.
If a customer hands you a purchase order you can't afford to fill, PO financing covers the supplier cost so you never have to turn the order down.
How does a PO financing deal work?
You receive a confirmed PO from a creditworthy customer. We verify the customer, the supplier and your margin, then pay the supplier directly or issue a letter of credit. Goods ship to your customer, you invoice, and the deal is typically transferred to an AR facility until payment arrives.
What does PO financing cost in Illinois?
Expect 1.5%–6% per 30 days on the funds advanced, depending on deal size, customer credit and how long the transaction runs. On a $200,000 order with $140,000 in supplier costs completed in 45 days, total fees might run $4,000–$8,000 — well worth it if the order nets $60,000 in gross profit.
Requirements for Illinois companies
A verified purchase order from a creditworthy business or government buyer, a reliable supplier, gross margins of roughly 15%+ and orders of about $50,000 or more. Your personal credit is a secondary factor.
PO financing vs. a bank loan
Banks lend on your history; PO funders lend on the transaction. That's why newer Illinois companies — even those growing in Chicago, Aurora, Rockford, Joliet, Naperville — can win financing for orders far larger than their balance sheet.
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Talk to a National Invoice Factoring specialist at (929) 658-8087 or apply online — no obligation.
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Written and reviewed by the National Invoice Factoring funding team — specialists in receivables and trade finance since 2009.
