MERCATO

Mercato guide

What Is Purchase Order Financing and How Does It Help Your Business?

PO financing lets you accept and fulfill orders you could not otherwise afford to stock — without draining your cash or taking on a traditional loan.

6 min read

Many small and medium businesses lose orders not because demand is missing, but because they cannot front the cash to buy inventory before they get paid by their own customers. Purchase order financing solves exactly that gap.

The core idea

Purchase order financing is short-term working capital tied to a specific purchase you need to make from a supplier. Instead of borrowing against your balance sheet, the funding is attached to one clear transaction: buy this inventory now, sell it, then repay from the proceeds.

How it helps a PyME

  • You can accept larger orders without waiting to save up the full purchase cost.
  • Your cash stays available for payroll, rent, and day-to-day operations.
  • Repayment is aligned to your sales cycle — typically 30 to 90 days — instead of an open-ended debt.
  • Terms are agreed up front, so there are no moving targets.

How Mercato does it differently

On Mercato, the financing for your purchase order comes from investors who fund a specific, disclosed deal — not from an opaque lender. The capital sits in an on-chain escrow and is released to your supplier in milestones as delivery is proven. You get transparency on where the money is, and your supplier gets the confidence of contract-enforced payment.

Is PO financing the same as a bank loan?

No. A bank loan is usually tied to your overall creditworthiness and balance sheet. PO financing is tied to one specific purchase and repaid from the sales it enables.

When should I use it?

When you have a confirmed need to buy inventory and a clear path to repay after your sales cycle, but you do not want to drain your cash reserves to do it.

What does it cost me?

You agree a return for investors up front as part of the deal terms. Because each deal is disclosed and milestone-based, you know the full cost before you deploy the escrow.

Next step

Ready to fund your next purchase order?

Create a deal and let investors fund your inventory — repaid after your sales cycle.

Create a deal
Browse deals

Continue reading