You’re probably thinking, “I’d love to accept that big retail order—if I could actually pay my suppliers initially.”
That’s where purchase order financing comes in.
Lenders like SouthStar Capital, King Trade Capital, and Liquid Capital cover your upfront costs by paying suppliers directly, so you’re not stuck choosing between growth and bankruptcy.
They typically fund in 7-10 periods, charge 1.15% to 6% monthly fees, and require solid customer creditworthiness.
Stick around to find out which lender matches your brand’s specific needs.
Key Takeaways
- SouthStar Capital offers third-party production quality monitoring and capital gap management without requiring equity stakes.
- King Trade Capital specializes in expedited import financing and manages tariff risks for international ingredient procurement.
- Liquid Capital provides funding within 24 hours with direct supplier payments and seamless accounts receivable integration.
- SMB Compass targets growth-stage beverage brands with quicker funding processes, avoiding traditional bank delays.
- Accord Financial combines purchase order financing with inventory funding solutions to optimize cash flowThe net amount of cash moving in and out of a business. and production.
The F&B Growth Trap: Why Cash Flow Kills Successful Brands
While you’re celebrating that massive purchase order from a national chain, your accountant’s probably having a different kind of party, the stressed-out kind. Here’s the brutal reality: 46% of food and beverage businesses fail within five years, mostly due to cash flowThe net amount of cash moving in and out of a business. collapse.
You’ve got the demand, but your bank account can’t fund the ingredient procurement needed to fulfill that. That’s the F&B Growth Trap. Alternative lenders often look to real-time cash flowThe net amount of cash moving in and out of a business. instead of historical credit scores to offer working capital when banks decline.
Your cash conversion cycle, the period between buying ingredients and getting paid, is killing you. Peak seasons generate 3-5x more revenue than slow periods, creating wild volatility. When you combine rapid inventory depletion with extended payment terms from major retailers, even profitable orders can drain your working capital reserves faster than you can restock shelves.
Traditional loans take months, but your produce expires in weeks. That’s where food and beverage PO financing steps in. This ingredient procurement funding strategy lets you utilize your customer’s credit, not your depleted reserves.
You’re not just solving a cash problem; you’re unblocking growth without equity dilutionThe reduction in ownership percentage of existing shareholde.
How Purchase Order Financing Works In The Food Industry
When you land that massive retail order, you’re facing three immediate headaches: funding the raw ingredients that’ll spoil if you don’t buy them now, paying your co-packer upfront to lock in production slots before they’re gone, and somehow managing the whole perishability clock ticking down while your cash sits with your customer.
PO financing solves that by letting your lender front the money directly to your suppliers, so you’re not scrambling to pay them from your own pocket while waiting 30, 60, or 90 periods for payment from the retailer.
You basically borrow against your customer’s creditworthiness rather than your own bank account, which means you can say “yes” to the order without watching your margins evaporate in a panic. This non-dilutive funding option preserves your equity and ownership stake while providing the immediate capital you need to fulfill large orders.
Funding Raw Ingredients And Packaging Materials
Because your supplier requires payment before your customer pays you, purchase order financing steps in action to bridge that frustrating gap. Here’s how this functions: a lender verifies your retail purchase order, then pays your suppliers directly for raw ingredients, packaging, and freight. You’re not juggling invoices or maxing out credit cards—the financier handles this.
This approach powers shelf-stable inventory loans and perishable goods trade finance by covering your actual cost for goods sold upfront. You receive materials, produce your product, deliver for your customer, and that’s when the payment arrives. The projected 8.7% growth rate reflects increasing adoption of these solutions among food and beverage suppliers managing working capital challenges.
The lender deducts their fee and sends you the remainder. This is non-dilutive F&B capital that keeps your equity intact while you scale confidently beyond your current cash reserves.
Paying Co-Packers Directly To Secure Production
Your co-packer won’t start mixing that organic tomato sauce or filling those glass jars until they’re confident they’ll receive payment, and honestly, you can’t blame them. That’s where co-packer funding solutions come in.
When you secure beverage manufacturing capital through PO financing, your lender wires money directly to your manufacturer, often splitting payments: 50% upfront to kick off production, then the remainder before shipping.
This guarantee means your co-packer moves your job to the front of the line instead of letting it gather dust. You’re not juggling promises anymore, you’re providing certainty. Eligibility criteria typically involve a proven industry track record and solid profit margins to qualify for this type of direct manufacturer funding.
For retail distribution funding, this direct-payment model eliminates the production delays that kill contracts. Your manufacturer gets paid punctually, you hit your delivery dates, and your retailer stays happy.
Managing Perishability And Shelf-Life Risks
Unlike selling widgets that’ll sit on a shelf for months, food and beverage suppliers operate in borrowed time, literally. Your ingredients spoil, your seasonal windows close, and your production slots vanish if you can’t fund orders quickly enough.
That’s where PO financing tackles perishability head-on. Lenders understand your urgency and fund bulk packaging finance directly to suppliers before goods deteriorate. They’ll even arrange independent inspections at shipping to catch quality issues before spoilage becomes your problem.
Here’s the revolutionary moment: you’re not stuck waiting 90 periods for bank approval while tomatoes rot. Funding hits your co-packer’s account within moments, keeping production humming and your margins intact. Because qualification focuses on end customer creditworthiness rather than traditional collateralAn asset pledged by a borrower to secure a loan, subject to requirements, food suppliers can access capital based on the strength of their customer orders.
Your collateralAn asset pledged by a borrower to secure a loan, subject to? Just the inventory itself, nothing else.
This speed alters perishability from a liability into your competitive advantage.
Top 11 Purchase Order Financing Lenders Reviewed
You’ve got options, and that’s the good news, because finding the right lender can literally make or break your F&B growth story. We’ve narrowed down the field to five powerhouse lenders who each specialize in different parts within the food supply chain, whether you’re moving massive volumes, sourcing ingredients from overseas, or racing against the clock for restocking perishables. The growing demand for flexible financing options across various sectors has made it easier for food and beverage suppliers to access the capital they need to scale operations. Securing short-term financing can be crucial for managing urgent restocking and operational needs.
Let’s walk through who they are and why they might be your secret weapon.
1. SouthStar Capital: Best For High-Volume F&B Distribution
When a major retailer calls with a six-figure order, SouthStar Capital’s got your back, literally funding every step from raw materials toward the delivery dock. They specialize in high-volume F&B distribution, meaning they understand your supply chain like they invented it.
You’ll get uncapped financing that scales with your growth, so you’re not stuck choosing between orders. Their revolutionary development? They monitor production quality as a third-party verifier, protecting both you and them. SouthStar Capital has successfully supported food importers like those in the guacamole and tortilla chips sector with $750,000 facility packages to meet cruise company demand.
Additionally, they shift smoothly from PO financing to accounts receivable financing after invoicing, which cuts your costs down the road. No equity stake required—you keep your company while they handle the capital gaps. That’s the deal you’ve been waiting for.
2. King Trade Capital: Best For International Ingredient Sourcing
The moment your supplier in Thailand sends you a quote for premium jasmine rice or your partner in Italy locks in an exclusive deal regarding aged balsamic vinegar, you’re facing a problem that most lenders simply don’t understand: international ingredient sourcing requires speed, trust, and someone who actually knows the difference between a letter of creditA bank guarantee ensuring a buyer's payment to a seller will and a customs nightmare.
King Trade Capital gets it. They’ve orchestrated import financing across continents, issuing letters of credit to overseas suppliers within moments while managing tariff risks that’d make your accountant weep.
They’ve backed sorbet brands sourcing global ingredients and facilitated timely holiday shipments from international manufacturers. You’re not just getting capital—you’re getting partners who understand that your exotic ingredients aren’t sitting in warehouses; they’re moving through ports, crossing borders, and racing against expiration timelines.
3. Liquid Capital: Top Choice For Rapid Raw Material Procurement
Speed kills in F&B, and Liquid Capital recognizes that. When you’re racing against expiration dates and production schedules, waiting weeks for financing isn’t an option.
Liquid Capital gets you funded in as little as 24 hours, which means your raw materials arrive in time, every time.
Here’s what makes them your swift procurement partner:
- 100% coverage of product costs in transit, so you’re not scrambling for out-of-pocket cash
- Direct supplier payments that guarantee your ingredients actually show up
- Seamless A/R integration that shifts your PO debt into invoice financingBorrowing money against outstanding invoices to improve imme post-sale
- 24/7 account access so you control your capital velocity in real-time
They’re built for businesses that move quickly and refuse to compromise on margins.
4. SMB Compass: Best For Growth-Stage Beverage Brands
As your beverage brand scales beyond the startup phase, you’ll find that traditional bank financing still moves at a snail’s pace, but SMB Compass doesn’t. This lender specializes in growth-stage beverage companies like yours, connecting you with diverse networks of capital providers customized to your exact needs.
Here’s what makes them stand out: they understand that you need profitable margins (they target at least 20%) and ironclad purchase orders from trusted retailers.
SMB Compass optimizes the entire process, cutting through red tape so you can access rapid capital for scaling production and expanding market reach.
They position themselves as the go-to choice for beverage suppliers ready to accelerate. When you’ve got momentum and solid retail commitments, SMB Compass alters those opportunities into immediate funding, no waiting around.
5. 1st Commercial Credit: Best For Perishable Goods And Cold Storage
When you’re shipping temperature-controlled ingredients across state lines or funding a sourdough bakery’s expansion into major grocery chains, you need a lender who gets that perishables don’t wait around: 1st Commercial Credit does.
Here’s why they’re your cold-chain partner:
- Direct supplier payments mean your production never stalls while waiting for cash to clear
- Perishable-specific underwritingThe process of assessing risk and creditworthiness before ap that verifies creditworthy buyers and resalable products, not just generic collateralAn asset pledged by a borrower to secure a loan, subject to
- Combined factoringSelling accounts receivable (invoices) to a third party at a along with PO financing keeps your cash flowing through extended production cycles without equity dilutionThe reduction in ownership percentage of existing shareholde
- Fast 3-5 day funding at 1.5-5% per 30 days, covering raw materials, logistics, and import duties
They’ll fund up to 90-day invoice terms and require just a profitable track record with existing customers. No debt in your balance sheet—just velocity.
6. PurchaseOrderFinancing.com: Best For Multi-Channel Retail Supply
While 1st Commercial Credit excels at keeping your cold chain humming, you’re probably thinking bigger—what if you’re not just shipping one product line, but juggling purchase orders from Walmart, Target, and Whole Foods all during the same period?
That’s where PurchaseOrderFinancing.com shines. This lender understands that multi-channel distribution is chaotic.
They’ll fund your raw materials, packaging, and shipping simultaneously across competing retailers without forcing you choose which order matters most. You need 20% profit margins, 12 months of trading history, and solid PO documentation—nothing crazy.
They’ll finance up to 90% of your supply chain costs, with monthly fees starting at just 1%. When your retail buyers pay, you settle up.
Scale more quickly without the financial headaches.
7. Kapitus: Best For Small Boutique Food Manufacturers
You’ve perfected your small-batch hot sauce recipe, landed a distributor deal, and suddenly you’re staring at a $150k raw material bill with only $20k in the bank. Kapitus understands. They’re built for bootstrapped food makers who refuse to dilute equity just for scale.
Here’s what makes Kapitus different:
- Speed matters, approval hits in as little as 4 hours, not months
- Boutique-friendly terms, they fund seasonal spikes without punishing your margins
- Hassle-free application, apply online in minutes, minimal paperwork
- Flexible funding options, PO financing along with SBA loans and lines of credit
They’ll pay your suppliers directly while you fulfill orders, keeping your cash flowing. You’re not taking on crushing debt; you’re strategically accessing capital linked to real customer orders. That’s how small batches become big business.
8. First Capital: Best For Large-Scale Grocery Chain Suppliers
Small-batch brilliance gets you started, but securing a contract with Whole Foods or Kroger? That’s when you’ll need Primary Capital in your corner.
They specialize in financing massive orders that would otherwise drain your entire working capital in one shot. You’re looking at up to 100% funding for your purchase order costs, meaning you can accept that $2M grocery chain deal without panic-selling equity or maxing out credit cards.
Primary Capital’s rapid underwritingThe process of assessing risk and creditworthiness before ap keeps your production timeline intact. Their nationwide supplier relationships mean they understand exactly how to structure deals for large-scale manufacturers and distributors.
They’ll fund your raw materials, packaging, and freight while you focus on providing exceptional products. Speed in addition to reliability equals shelf space secured.
9. Star Funding: Best For Consumer Packaged Goods (CPG) Importers
Once you’ve landed that massive Walmart or Target order, you’re facing a different beast entirely, one where traditional suppliers simply can’t keep pace with your funding needs. Star Funding gets it.
Operating from Manhattan for over 18 years, they’ve become the go-to partner for CPG importers who need cash now, not in 90 periods.
Here’s what makes them different:
- Direct supplier payments eliminate the middleman stress—your vendors get paid immediately while you preserve cash
- Up to 100% production financing covers ingredients, packaging, duties, and freight without bleeding your reserves
- 7-10 duration onboarding (or 2 intervals if you’re urgent) means you’re moving quickly
- Non-recourse factoringSelling accounts receivable (invoices) to a third party at a protects you when invoices hit—Star absorbs the risk
You’re not just getting funding; you’re getting a partner who understands why your margins matter.
10. Wayflyer: Best For D2C Brands Moving Into Physical Retail
The jump from selling online towards landing shelf space at Target or Whole Foods is where most D2C brands hit a wall. You’ve nailed your direct-to-consumer game, but retail demands massive upfront inventory investments that’ll drain your bank account before customers even see your product.
Wayflyer gets this. Their wholesale financing funds your production from start to retailer payment, bridging that brutal cash flowThe net amount of cash moving in and out of a business. gap. You’ll access up to $5 million without diluting equity, and they move quickly, funding hits your account in 24 hours following approval.
What makes Wayflyer different? They don’t obsess over assets or collateralAn asset pledged by a borrower to secure a loan, subject to. Instead, their tech-enabled platform analyzes your actual performance data across sales, marketing, and accounting platforms. You’re approved based on what you’re actually doing, not what you own. That’s the kind of capital velocity that turns D2C success into retail domination.
11. Accord Financial: Best For Combined PO And Inventory Funding
you’ve got purchase orders stacked up, but you’re also sitting atop inventory that’s tied up your cash. Accord Financial understands this tension: they’ve spent 40 years solving exactly this issue for F&B suppliers.
What makes them different isn’t just one solution, it’s their combo approach:
- PO financing that funds your raw materials before customer payment arrives
- Inventory loans using your stock as collateralAn asset pledged by a borrower to secure a loan, subject to to release trapped capital
- Letters of credit posted directly to suppliers so production never stalls
- Accounts receivable advances at 85% of invoice value, converting aged payments into immediate cash
You’re not choosing between addressing purchase orders or inventory: you’re getting both. That’s capital velocity on steroids. With Accord, you stop playing the waiting game and start scaling confidently.
How To Qualify For F&B Purchase Order Financing In 2026
If you’ve got a legitimate purchase order from a credible buyer but your bank account’s looking lean, qualifying for PO financing isn’t as mysterious as the process might seem.
Lenders care most about your customer’s financial stability and payment history, not how long you’ve been in business. You’ll need to prove a 20% profit margin on the order, show solid supplier relationships, and submit your PO, invoices, and basic financials.
The lender evaluates whether your buyer can actually pay and your suppliers can deliver punctually. Think of it this way: you’re not really borrowing against your company; you’re borrowing against your customer’s creditworthiness. That’s the transformative factor.
Many businesses use a cash secured line of credit as a flexible and affordable way to complement purchase order financing and manage working capital efficiently.
Analyzing The Cost: Fee Structures For Food Suppliers
Now that you’ve secured a lender willing to fund your purchase order, there’s one more reality check waiting: understanding exactly what that lifeline’ll cost you.
Your fees typically range from 1.15% to 6% monthly, calculated upon your total order value, not just the advance amount. Here’s what shapes your actual costs:
- Customer creditworthiness – stronger retail partners mean lower rates
- Order complexity and size – larger, simpler orders reduce percentages
- Your profit margins – lenders want at least 20% cushion
- Payment timeline – quicker collections equal affordable financing
The math matters because these fees directly hit your bottom line.
If you’re operating lean, a 4% monthly charge can make or break profitability. Nevertheless, when you’re scaling quickly with major retailers, that cost often pays for itself through accelerated growth and market dominance.
Effective working capital management, including optimizing your Days Sales Outstanding, is essential to keep cash flowThe net amount of cash moving in and out of a business. healthy and minimize financing costs.
The Future Of F&B Financing: Real-Time Supply Chain Credit
As supply chain visibility evolves from a nice to have into a competitive necessity, lenders are fundamentally changing how they evaluate risk and price your PO financing.
Real time tracking tech, think RFID tags, IoT sensors, and blockchain, gives lenders crystal clear visibility into your inventory and production timelines. That transparency works in your favor.
Lenders who can monitor your temperature controlled shipments and batch tracking don’t have to guess whether you’ll deliver. They price your rates lower because they’ve got proof you’re managing risk smartly.
You’re no longer a black box, you’re a data driven partner. This shift means quicker approvals and better rates for suppliers who adopt supply chain tech.
Your competitive edge? You’re not just borrowing capital, you’re proving you deserve it, thanks to enhanced accuracy and reduced errors provided by automation in data management.
Conclusion: Securing Your Brand’s Place On The Shelf
Conclusion: Securing Your Brand’s Place On The Shelf
You’ve got the visibility, the data, and the lenders standing ready—so what’s stopping you from claiming your place in those shelves?
The path forward hinges upon three critical moves:
- Lock in your lender now while market rates remain favorable and capital flows freely toward proven F&B operators
- Stack your POs strategically to demonstrate consistent demand and build negotiating power with suppliers
- Automate your reporting using supply chain APIs that lenders already monitor for real-time account health
- Scale confidently knowing your margins stay intact and your equity remains yours alone
The $12.9 billion PO financing market isn’t slowing down. Your competitors are already moving.
The question isn’t whether you can afford securing funding—it’s whether you can afford not securing it. Your shelf space is waiting.
Leveraging purchase invoice financingBorrowing money against outstanding invoices to improve imme can provide immediate cash flowThe net amount of cash moving in and out of a business. to support these crucial growth strategies.
Frequently Asked Questions
Can PO Financing Cover Packaging and Labeling Costs, or Only Raw Ingredients?
You’re not limited to raw ingredients. PO financing covers your thorough production cycle—packaging, labeling, ingredients, and all manufacturing expenses. You’ll submit extensive cost documentation, and lenders fund the entire operation in order to get your product retail-ready.
What Happens if My Retail Customer Cancels Their Order After Funding?
You’re liable for the full amount. The lender’s already paid your suppliers and expects repayment from your customer’s invoice. You’ll absorb inventory costs, fees, and potential defaultFailure to repay a debt according to the terms of the loan a liability—devastating without cash reserves.
How Quickly Can I Access Funds Once a PO Is Approved?
You’ll access funds within 24 hours in minutes depending upon your lender. Top-tier providers like Kickfurther and Star Funding execute same-day decisions, letting you pay suppliers immediately and launch production without capital delays.
Are There Penalties for Early Repayment of PO Financing Facilities?
Yes, you’ll face early repayment penalties regarding most PO financing facilities. Lenders typically charge 1-5% from your remaining balance to compensate for lost interest income. Always review your agreement’s specific terms before accelerating payoff.
Can International Suppliers Be Paid Directly Through PO Financing Agreements?
Yes, you can. Leading PO financing providers like Gateway Trade Funding and Oxford Commercial Finance wire funds directly toward your overseas manufacturers via letters for credit or cash-against-documents arrangements, ensuring smooth international fulfillment.
Gerry's commitment to helping businesses thrive is evident in his track record of providing tailored financial guidance. He understands the unique challenges that companies face and is dedicated to finding innovative solutions to support their growth.
When he's not working with clients or exploring the dynamic world of business financing, Gerry enjoys staying updated with industry trends and sharing his insights through informative articles. His passion for empowering businesses with financial knowledge is a driving force behind his work.
Connect with Gerry Stewart to tap into a wealth of financial expertise and unlock opportunities for your business's success.
