Where the cash goes before you get paid
Filling a large order usually means buying materials, paying labor or a contract manufacturer, covering packaging and labeling, and shipping, all before the customer pays. If the customer pays on net 60 or net 90 terms after delivery, the total gap can stretch for months. A bigger order means a bigger gap, even when the order is profitable.
- Raw materials and components
- Production labor or contract manufacturer deposits
- Packaging, labeling and compliance requirements
- Freight and delivery
- Time until customer payment after delivery
Which funding options tend to fit
Short-term working capital commonly covers materials and production for a single order, sized to your business deposits. A business line of credit fits businesses that fill large orders repeatedly. Equipment financing can help if the order requires added machinery with long-term use. The right choice depends on order size compared with your normal revenue and how long payment takes.
- Short-term working capital: a single large order
- Business line of credit: repeat large orders
- Equipment financing: machinery the order requires and you will keep using
- Term loans: capacity expansion tied to a long-term contract
Alternatives some owners compare
Purchase order financing and invoice factoring are alternatives some product businesses compare. With purchase order financing, a finance company typically pays your supplier directly for goods tied to a confirmed customer order. With invoice factoring, you sell delivered invoices for an advance and the rest, minus fees, when the customer pays. Both rely heavily on your customer's credit.
These can work when an order is far larger than your revenue history supports, but they add their own fees and requirements. Compare total cost and control against cash-flow-based options before deciding.
Check the order before you fund it
A big order from a well-known buyer is exciting, but the terms decide whether it is profitable. Read the purchase order and vendor agreement for payment terms, chargebacks and deductions, delivery penalties, cancellation rights and compliance costs. Then build a cash timeline from the first supplier payment to the day you expect the customer payment to land.
- Payment terms and when the clock starts
- Chargebacks, deductions and compliance fines
- Late delivery and cancellation terms
- Packaging, labeling and routing requirements
- Whether reorders are expected
When the order is bigger than your normal sales
If the order is several times your usual monthly revenue, cash-flow-based funding may not stretch to cover it all, since most offers are sized to deposits. Options include negotiating a customer deposit, splitting the order into phased deliveries, asking suppliers for terms, covering part from cash, or comparing alternatives tied to the order itself.
- Ask the customer for a deposit or progress payments.
- Propose phased deliveries with separate invoices.
- Negotiate supplier terms on materials.
- Fund the portion normal cash flow cannot cover.
Production and delivery risk
The risk in a large order is not only the customer paying late. Materials can arrive late, production can fail quality checks and freight can be delayed, and each problem pushes back your payment while funding payments continue. Build buffer time into the schedule and cash cushion into the budget, and communicate early with the customer if dates change.
Manufacturers and brands can find more on the manufacturers and product brands page.
What funding partners typically ask for
Many funders typically ask for recent business bank statements, ID, ownership details and a voided check, plus the signed purchase order, supplier quotes for materials, the production schedule and the customer's payment terms. Requirements vary by product and funder; many look at time in business, monthly revenue and credit.
Use the documents checklist and present the order clearly.
Frequently asked questions
What is purchase order financing?
An alternative some owners compare, where a finance company pays your supplier to produce goods for a confirmed customer order, then collects when the customer pays. It relies heavily on the customer's credit and carries its own fees and requirements.
Can I use funding if my customer pays in 60 or 90 days?
Yes, but plan for the full gap from your first supplier payment to the customer's payment. Choose a structure whose payments normal cash flow can carry until then. Negotiating a customer deposit, progress payments or phased invoices can shorten the gap considerably and reduce how much you need to fund.
Does my customer's credit matter?
For cash-flow-based products, funding partners mainly review your own business revenue and credit, but a creditworthy customer helps explain the request. For alternatives like invoice factoring and purchase order financing, the customer's credit and payment history are often central to whether the deal works.
Do I need the purchase order signed before applying?
Not always. You can start with a draft or letter of intent so the review begins early, then send the signed order when you have it. Funding tied specifically to the order will usually need the signed version.
Landed the big order?
Apply online with the order details so our funding partners can review options that fit.
Updated September 14, 2026 · Prime Funding Now Funding Team