Can PO finance through UK Business Loans help my manufacturing business take on a large export order?

Short answer: Yes — purchase order (PO) finance can often unlock the working capital needed to fulfil a large export order. PO finance bridges the gap between receiving a signed export contract and getting paid by your buyer, allowing manufacturers to pay suppliers, start production and ship goods without draining existing cash reserves. UK Business Loans does not lend directly; we match you with brokers and specialist lenders who can quote on PO finance solutions. Get a Free Eligibility Check to see whether your order is fundable.

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Quick answer: Can PO finance help me?

PO finance provides short‑term funding so manufacturers can pay suppliers, buy materials or cover production costs required to fulfil a purchase order or export contract. For large export orders — where you need to front substantial material, labour or shipping costs before payment — PO finance can be a practical, non‑dilutive way to accept the work and deliver on time. It’s not universal: lenders assess the buyer’s creditworthiness, the firmness of the contract, margins and export documentation before committing.

Note: UK Business Loans introduces you to specialist brokers and lenders — we are not a lender. Submitting a short enquiry is no obligation and does not make you apply for finance. Free Eligibility Check

What is Purchase Order (PO) Finance?

Purchase Order finance is a form of trade finance that bridges the working capital gap between receiving a buyer’s PO and being paid after delivery. Typical mechanics include:

• Funder pays your supplier (or you) to acquire materials and start manufacture;
• You manufacture and ship goods under the PO; the buyer pays the invoice on agreed terms;
• The funder is repaid from the buyer payment (after fees/interest).

Providers range from specialist PO financiers and trade lenders to invoice finance companies and brokers who can blend structures (pre‑shipment finance, supplier finance, bonded warehouse funding). In manufacturing this can fund raw materials, sub‑contract work, or full turn‑key production depending on the facility.

Why PO finance is especially useful for manufacturing export orders

Manufacturers face several export‑specific cashflow challenges. PO finance helps address many of them:

• Large upfront material costs: Shipments to foreign buyers often require buying expensive components or bulk raw materials before goods are produced.
• Long lead times: Manufacturing and lead times can stretch cashflow — PO finance covers this gap.
• Buyer deposit or progress payments: Some buyers expect you to cover costs until delivery; without cash you may lose the order.
• Maintaining supplier relationships: You can pay suppliers on time and often negotiate better terms.
• Win more contracts: You can bid for larger export orders that would otherwise be unaffordable.

Mini case: A Midlands metal fabricator wins a €400k export order requiring expensive steel and plating. Using PO finance the funder pays suppliers, the factory completes the order, the container ships, the Dutch buyer pays on invoice terms and the funder is repaid — the manufacturer fulfils the contract and protects cashflow.

When PO finance may NOT be suitable

PO finance is powerful, but not always right. Typical limitations:

• Low‑margin orders where fees would eliminate profit;
• No firm PO or verbal orders only;
• Buyers with poor or unverified credit;
• High political/country risk or sanctions concerns;
• Very small orders where transaction fees make funding uneconomic.

Alternatives include invoice finance, asset finance, export working capital facilities or buyer‑credit arrangements — brokers often combine products to create workable solutions.

Eligibility checklist for manufacturers

Below are the typical items lenders look for when assessing PO finance for export orders:

• Signed purchase order or export contract from the buyer;
• Evidence of buyer creditworthiness (references, bank confirmation, LC or payment terms);
• Clear production plan, supplier quotations and timelines;
• Company trading record and recent turnover figures (many funders consider 12+ months trading preferable);
• Gross margin on the order large enough to cover finance fees;
• Ability to provide export paperwork (commercial invoice, packing list, bill of lading).

Free Eligibility Check — complete a quick form and we’ll match you to lenders who specialise in manufacturing export PO finance.

Typical PO finance structures, costs & timelines

Common structures

• Supplier‑pay: Funders pay your supplier directly based on approved invoices/quotations;
• Manufacturer advance: Fund advances to your business to buy materials and start production;
• Bonded or warehouse arrangements: Goods held in bonded facilities until payment/clearance;
• Letter of Credit (LC)‑backed: Combines LC confirmation with PO funding for additional security.

Costs & fees

Costs vary significantly by structure, order risk and buyer strength. Expect combinations of:

• Facility fees / set‑up fees;
• Interest margin or discounted advance rates (often higher than standard bank lending due to short‑term risk);
• Transaction fees for documentation, FX or shipping verification.

Ranges change quickly — your matched broker or lender will provide exact pricing after a short assessment.

Typical timeline

• Initial match & soft eligibility check via UK Business Loans: within hours;
• Funder due diligence & documentation: days to 2–3 weeks depending on complexity;
• Funds to supplier or manufacturer: 1–7 working days after approval.

For a fast start, Get Quote Now — submit the short form and we’ll match you quickly.

How UK Business Loans helps manufacturers

We are an introducer — not a lender. Our role is to match your export PO with specialist lenders and brokers who understand manufacturing and trade finance.

Process:

1. Complete a short enquiry form (2 minutes) with basic company and order details;
2. We match you to partners who specialise in manufacturing/export PO finance;
3. Expect contact from a matched broker or lender within hours to discuss terms and next steps;
4. You receive quotes and choose the provider that best fits your needs. No obligation to proceed.

We focus on speed, sector expertise and confidentiality to increase your chance of a good outcome. For manufacturers specifically, see our industry guidance on manufacturing business loans.

Documents you’ll likely need to submit

• Signed purchase order or export contract;
• Buyer details and proof of buyer credit (bank references, LC);
• Supplier quotes and invoices;
• Last 12–24 months bank statements and management accounts;
• Export documentation (commercial invoice, packing list, shipping docs) as the transaction progresses;
• Company registration and VAT information.

Exact requirements vary by lender — a broker will confirm the minimal set during initial contact.

Risks and practical tips for manufacturers using PO finance

• Margin erosion: Fees and interest reduce net profit — price the order accordingly;
• Over‑reliance on debt: Use finance for growth, not to cover chronic cashflow problems;
• Currency risk: Export receipts in foreign currency may open FX exposure — consider hedging;
• Supplier dependency: Keep alternate suppliers where possible;
• Export compliance: Check sanctions, export licences and documentation requirements early.

Practical tips: negotiate supplier deposits, insure shipments (marine/credit insurance), consider blended packages (PO + invoice finance) and use a broker to compare multiple structures. Speak to a specialist broker — Get Quote Now.

Case study / example outcome

A West Yorkshire engineering SME won a £350k export contract for precision components. The buyer required delivery in 10 weeks but offered 60‑day payment terms. The manufacturer used PO finance to pay suppliers and subcontractors, completed production, shipped to the EU and was paid on terms. The funder was repaid from the buyer payment. Result: order delivered on time, supplier relationships preserved and company growth without equity dilution.

Free Eligibility Check — find out if your order could follow a similar path.

FAQs

Will PO finance cover export VAT, customs and shipping?

It depends. Some funders only finance raw materials or supplier costs. Others will include wider pre‑shipment costs such as VAT, customs and shipping. The scope is agreed during lender assessment.

How quickly will a lender respond?

Once you submit your enquiry via UK Business Loans, matched brokers/lenders typically contact businesses within hours. A full offer follows after due diligence which can take several days.

Do buyers need to be UK‑based?

No. Many funders will support export orders to reputable international buyers — particularly where buyer credit can be evidenced or supported by an LC.

Will using PO finance affect my credit score?

Submitting an enquiry through UK Business Loans does not affect your credit score. Lenders may perform credit checks later in the application process if you progress.

Is PO finance cheaper than other options?

Cost depends on risk, buyer strength and structure. PO finance can be more expensive than bank loans but cheaper than turning down profitable export orders. A broker can compare options for you.

Get Quote Now to compare options from multiple providers.

Compliance & transparency

UK Business Loans is an introducer and does not provide loans or regulated financial advice. We introduce businesses to lenders and brokers who will confirm costs, terms and eligibility. Submitting an enquiry is not an application and does not affect your credit score. By submitting your details you consent to us sharing them with approved lenders/brokers — see our Privacy Policy and Terms for full details.

Ready to fulfil that export order?

If you have a signed purchase order or export contract and need working capital to fulfil it, start with a quick, free eligibility check. Complete a short form (2 minutes) and we’ll match you with specialist brokers and lenders who can quote fast and help you deliver the order.

Get a Free Eligibility Check — Get Quote Now

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Author: Lucy Hammond, Head of Industry Partnerships — 10+ years in SME finance and trade funding. Published: 31 Oct 2025. Last updated: 31 Oct 2025.

Further reading & internal resources

• Invoice finance
• Export finance
• Manufacturing loans
• About us
• FAQ

External guidance: GOV.UK export documentation and UK Export Finance offer useful, authoritative information on export controls, documentation and credit insurance.

Privacy note: By submitting an enquiry you consent to UK Business Loans sharing your details with approved brokers and lenders. Submitting an enquiry is free and no obligation. For full details please see our Privacy Policy and Terms & Conditions.

1. What is purchase order (PO) finance and how can it help my manufacturing export order?
PO finance is short‑term trade funding that pays suppliers or advances your business to buy materials and start production so you can fulfil large export orders without draining cash or giving up equity.

2. How do I get PO finance through UK Business Loans and will submitting an enquiry affect my credit score?
Complete the short online enquiry to be matched with specialist brokers and lenders — the enquiry is a soft, no‑obligation check and does not affect your credit score.

3. How quickly will matched lenders or brokers respond after I submit an enquiry?
Matched brokers or lenders typically contact you within hours, with full due diligence and formal offers taking several days to 2–3 weeks depending on complexity.

4. What documents will I need to apply for export PO finance?
Lenders usually require a signed purchase order or export contract, buyer details and proof of buyer credit (eg bank references or LC), supplier quotes/invoices, recent bank statements and management accounts, and export documentation as the deal progresses.

5. Will PO finance cover export VAT, customs and shipping costs?
Some funders include wider pre‑shipment costs such as VAT, customs and shipping, while others fund only materials or supplier costs — the exact scope is confirmed during lender assessment.

6. How much does PO finance cost compared with traditional bank loans?
PO finance is often more expensive than standard bank lending due to short‑term and transaction risk, typically involving setup/facility fees, interest or discount margins and transaction or FX fees, which a broker can compare for you.

7. Who is typically eligible for PO finance?
Manufacturers with a signed PO or export contract, evidence of buyer creditworthiness, sufficient gross margin on the order and a trading history (often 12+ months) are the most likely to qualify.

8. Can I use PO finance for international buyers and does buyer credit affect approval?
Yes — many funders support exports, but approval heavily depends on the buyer’s credit strength or security (eg an LC), which directly influences funding terms and availability.

9. When is PO finance not suitable and what alternatives should I consider?
PO finance may be unsuitable for low‑margin orders, verbal or unconfirmed POs, poor buyer credit or high country risk — alternatives include invoice finance, asset finance, export working capital or blended funding solutions.

10. Are the brokers and lenders you connect me with regulated and trustworthy?
Yes — UK Business Loans is an introducer (not a lender) that matches you with reputable, FCA‑regulated brokers and lenders who will provide full cost, terms and eligibility details.