Supplier costs versus customer payment
The cash gap on a large order is the most you are out of pocket at any point, not the order total. In the timeline above, a $120,000 order creates a peak gap of $57,000, because the deposit softens the early supplier payments but the balance arrives only after delivery.
Build your own version of the table. List every payment in the order it happens: supplier deposits, production, freight, duties and any customer deposit. Then place the customer's payment dates beside them. The most negative number in the running column is the amount to ask about.
Include a small cushion for delays, because a late shipment pushes the customer's payment later while your costs stay fixed.
Also check your supplier's flexibility. Some will accept a smaller first deposit, stage shipments, or ship part of the order early so the customer can pay part of the balance sooner. Each change shortens the time your cash is out and can lower the amount you need to fund.
Hypothetical example: order-to-cash timeline for a $120,000 order
| When | Event | Cash in or out | Running cash |
|---|---|---|---|
| Week 0 | Customer pays 20% deposit | +$24,000 | $24,000 |
| Week 1 | Pay supplier 50% deposit on $78,000 cost | -$39,000 | -$15,000 |
| Week 4 | Pay supplier remaining balance | -$39,000 | -$54,000 |
| Week 5 | Pay freight to the customer | -$3,000 | -$57,000 |
| Week 10 | Customer pays $96,000 balance (net 30 after delivery) | +$96,000 | $39,000 |
Every figure is hypothetical. The lowest running cash, -$57,000, is the gap to cover before the customer's balance arrives, and the $39,000 left at the end is margin before funding cost and other expenses.
Customer deposits and cancellation terms
A signed order protects you only as far as its terms do, so read what happens if the customer cancels, delays acceptance or disputes quality. A funder reviewing the order will look at the same terms.
- Deposit: how much is paid up front and whether it is refundable.
- Cancellation: what the customer owes if they cancel after you have paid the supplier.
- Acceptance: how and when the customer confirms the goods are right.
- Payment terms: net 30, net 60 or on delivery, and any penalty for late payment.
If the customer is new to you, check their payment history with others in your industry before you commit your cash. For custom goods that cannot be resold, cancellation terms matter even more. Ask your attorney to review contracts that put a large amount at risk.
Product structures to consider
Not every offer for a large order is purchase order financing. Depending on your business and the order, a funder may review short-term working capital, a business line of credit, a term loan or revenue-based financing.
Each fits a different shape of order:
- Short-term working capital: a single order with a clear payment date.
- Business line of credit: repeat orders, since funds can be drawn again after repayment.
- Term loan: a larger order that will lead to ongoing volume.
- Revenue-based financing: sellers whose sales rise and fall.
Rate, term and payment schedule vary by product and by the strength of the business. Read working capital for inventory deals to see how short-term capital is usually structured, and compare it with the points in the guide to funding a large purchase order.
If an order repeats every quarter, a revolving product may save you from applying each time. If it is a one-time event, a short product that ends when the customer pays is usually cleaner. Choose the structure that matches how long the gap lasts.
What documents describe the order
A funder wants to see the order itself, plus proof of what it will cost you and how the business is doing today. Clear documents shorten the review.
- The purchase order or signed contract, showing quantity, price and delivery date
- The supplier quote or invoice with your cost and payment schedule
- Recent business bank statements
- Government-issued ID and a voided business check
Longer or larger requests may add tax returns or financial statements. Write a short summary of the order: who the customer is, what they ordered, what you pay and when you expect to be paid. Sole proprietors can apply, and the applicant needs 50% or more ownership.
A decision typically arrives within 24 hours of a complete application, and funding time varies by product. There is no obligation to accept an offer. Ready to begin? Start the application.
Frequently asked questions
Is this the same as purchase order financing?
Not necessarily. A funder reviews the business and the order, and may offer products such as working capital or a line of credit instead. The structure depends on the file.
Does the customer need to know about the funding?
That depends on the product and the offer. Read the written offer carefully and ask the funder how repayment is collected before you accept.
What if the customer pays late?
Late payment is the main risk. Build a delay cushion into your timeline and choose a repayment schedule you can meet if the customer's payment slips.
Can I apply before the order is signed?
You can describe the opportunity, but a signed order or firm purchase order gives the funder more to review. Attach what you have.
Does applying affect my credit score?
Checking your options does not affect your personal credit score, and you do not have to accept an offer.
Have the order in hand? Explore your options
Share the purchase order and supplier quote and see what a funder can review.
Updated October 17, 2026 · Prime Funding Now Funding Team