A buyer said yes. Now you need to show up.
Getting into retail is the easy part compared to funding it: production at wholesale scale, net-60 terms, chargebacks, and a vendor guide thicker than your business plan.
Retail pays slower than it orders
The PO from a major retailer is a beautiful and terrifying document. It's real demand at real volume — and it's also a commitment to produce, ship, and float that volume on their payment terms. Net-60 from delivery can mean five months between paying your factory and seeing a dollar back.
Miss the ship window and you're not just losing this order. Retail buyers grade reliability, and a blown first PO follows you into every future line review. The capital plan is as much a part of retail readiness as the packaging refresh.
This is the specific problem purchase order financing was built for. Your buyer's creditworthiness — not your balance sheet — carries the underwriting, and the facility scales with the order.
The structures that fit this moment
Honest pros and cons — none of these is right for everyone.Purchase order financing
The lender pays your manufacturer against the retailer's PO. Built for exactly this moment — first big retail order, cash that doesn't cover it.
- Qualification rides on your buyer's credit, not just yours
- Scales with the order — a $2M PO can be financed even if you've never borrowed
- No dilution, and it disappears when the order is done
- –Only works with confirmed POs from creditworthy buyers
- –Fees compress your margin — thin-margin orders may not pencil
- –The lender is in your supplier relationship; expect verification calls
Line of credit
Covers the gaps PO financing doesn't: tooling, packaging compliance, EDI setup, and the chargebacks that arrive with retail life.
- Cheapest way to hold dry powder — pay only for what you draw
- Reusable: repay and the capital is available again
- Bank lines build a lending relationship that compounds over years
- –Bank lines want 2+ years of history and clean financials
- –Limits are often lower than what a big inventory buy needs
- –Variable rates move with the market — budget for the top of the range
Term loan
If retail is a channel strategy rather than a one-off order, longer-term capital funds the whole ramp instead of one PO at a time.
- Predictable payment you can put in the budget and forget
- Longer terms fit investments that pay back over years, not months
- Often the lowest headline cost of capital on this list
- –Slowest underwriting — expect full financials and sometimes a personal guarantee
- –Fixed payments don't care that your sales are seasonal
- –Prepayment penalties exist; read that clause before signing
What lenders will actually look at
No mystery underwriting. This is the review, in the open — so you know where you stand before anyone else does.
The questions sellers actually ask
The retailer hasn't issued the final PO yet — can I start now?+
Yes, and you should. Getting the facility pre-arranged during the commitment stage means you can accept the PO the day it lands instead of burning two weeks of your production window on financing.
Does PO financing work for smaller regional retailers?+
It depends on the buyer's credit profile. Nationally rated chains are straightforward; smaller retailers get case-by-case review. Bring us the details and we'll tell you which lenders will look at it.
What does it actually cost?+
Typically a percentage of the PO value per 30 days outstanding — the exact rate depends on your buyer, your margins, and the timeline. It only makes sense on orders with healthy margin, and we'll tell you plainly if yours doesn't pencil.
Will my retail buyer know I'm using financing?+
Usually yes — the lender typically verifies the PO and may take assignment of the receivable. This is completely normal in wholesale; buyers see it constantly and it doesn't signal weakness.
See which lenders fit this exact situation.
Five minutes to a matched shortlist. No credit pull, no obligation.