Purchase Order Financing has long been the alternative to factoring invoices, as the supplier is guaranteed their payments and the purchaser is guaranteed their supplies without any financial delays, that can occur with factoring. Also there is no percentages to maintain or having to face penalties for invoice delays or worse yet non-payments by the clients.
MWAM is able to provide worldwide financing of up to 90% of any PO issued by strong US Based, Credit Worthy Customers. Additionally we are able to provide worldwide financing of up to 95% of any PO that is secured by an Irrevocable, Transferable Letters of Credit issued or confirmed by banks acceptable to us. Amounts range from $300,000 up to $10,000,000. We will consider financing smaller transactions, provided there is repeat business.
The primary criteria used to determine acceptable PO transactions are the right product, produced in a timely fashion, in the right quantities to a strong customer, rather than the balance sheet. MWAM can fund a PO for new clients in as little as three weeks. The only collateral considered for PO financing is the actual PO and its Proceeds (inventory and receivables).
In Trading Transactions, where you buy and sell a finished product, we will finance from the time the purchase order is issued through the customer receivable, if needed. The Cost of this type PO Financing varies depending on a number of factors such as the risk of the transaction, projected volume, the length, detail and repetitiveness of each transaction. The cost, however, is generally between 3-5% per month of our exposure.
For Work-In-Process Situations, where a product is being produced or assembled, we will finance up to sixty (60) days, although we will consider going longer on a case by case basis. The Cost of this type of PO Financing will generally fluctuate between 5 to 6% of the sale price of the goods for the first 60 days. Fees will increase, if the transaction is extended.
If a Letter of Credit is required, a fee of ½% will be charged for the first 60 days.