Purchase Order Finance – an innovation in working capital

SME Capital Finance Limited has devised a completely new form of supply chain finance. Without providing security or personal guarantees, suppliers can obtain low cost flexible working capital when it’s needed most: when a purchase order is issued. This is available to suppliers of HM Government, Devolved Government, Local Authorities or Blue Chip organisations.

Helping suppliers

Helping suppliers

Purchase Order Finance enables suppliers to tender for procurement contracts without the need to raise working capital to finance the costs of production or delivery of services.

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Strengthening supply chains

Strengthening supply chains

The buyer’s costs and risks will be reduced because the availability of working capital improves the supplier’s ability to deliver goods and services. These benefits are greatest for integrated supply chains where the cost to the buyer of non-delivery can be a significant multiple of the actual contract value.

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How it works

We make up to 50% of the purchase order value available as working capital to suppliers at the time that the purchase order is issued.

A purchase order is issued by the buyer
The supplier receives an initial remittance of up to 50% of the purchase order value (less fees) from SME Capital Finance
The supplier is now able to meet the costs of delivering the order
The supplier delivers the goods/services to the buyer.
The buyer accepts the goods/services
An invoice is raised by the supplier
The invoice is approved by the buyer
The buyer pays 100% of the invoice value to SME Capital Finance's trust account
SME Capital Finance remits the remaining balance to the supplier
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