Hi All!

I am an inventor and recently learned of Purchase Order Financing. In case you don’t know what it is, briefly, it is financing that can be used to pay for the manufacture of goods based on a purchase order that has been placed for those goods by a reputable company –like a big retailer. The funding plus a finance charge is repaid to to the P.O. financing company after the goods have been delivered to the purchaser and they have been invoiced for them or after the purchaser pays for the goods –depending on the terms and the timing.

The advantages of P.O. financing to the small business person, like individual inventors, can be enormous for a couple of reasons. In the current economic climate, with the credit markets as tight as they are, it is very difficult to obtain small business loans or lines of credit from banks to fund the manufacture of goods. P.O. financing on the other hand is based primarily on the merits of the current transaction and less about the number of years in business or the financial condition of the borrower. Also, for those small business people that may think they have few options but to take on an investor to finance their production in exchange for a percentage of their business, P.O. financing may be an answer that allows you to retain the equity in your business.

I was speaking about this form of financing with a friend of mine who is a partner in a private equity firm and he may be willing to offer this type of service to the EN community. However, before pursuing this further, I was wondering if there are any of you out there that feel they may be in a position (or future position) to take advantage of such a service if it were to be offered? If you feel comfortable, please describe why you think your situation is appropriate for P.O. financing. If you have any comments or questions about this concept or have any personal experiences with existing P.O. financing companies, I would love to hear about them.

-Thanks for your input!
Steve