Case Study: How a Growing Distributor Used Purchase Order Financing and Invoice Factoring to Keep Cash Flow Moving
When a company finally lands that “big order,” it feels like a win — until they realize they don’t have the upfront capital to buy the inventory needed to fulfill it. This is exactly where a mid-sized Texas-based electronics distributor found itself. The demand was there, the customer was ready, the margins were solid… but the cash wasn’t. That’s where Purchase Order Financing and Invoice Factoring can help.
Instead of turning down a massive opportunity, the company used a smart one-two punch: Purchase Order (PO) Financing to secure product and Invoice Factoring to unlock ongoing working capital. Here’s how the whole thing played out.
The Situation: A Big Order With No Cash to Fulfill It
The distributor had just secured a $750,000 order from a national retail chain. The problem? Their supplier required 50% upfront, and the company’s cash was already tied up in other orders and payroll.
Traditional bank financing wasn’t an option — long approval times and strict underwriting would have easily cost them the deal.
The company needed a fast, simple funding solution.
*Small Business Cash Flow Challenges
Step 1: Using Purchase Order Financing to Buy the Product
The distributor approached a funding partner for Purchase Order Financing, which is designed specifically for situations like this: a confirmed order with no capital to secure the goods.
Here’s how PO Financing helped:
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The PO finance company paid the supplier directly.
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Production started immediately — no waiting for bank approvals.
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The distributor didn’t have to use any of its own cash.
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The customer received exactly what they ordered, on time.
By letting the capital provider handle supplier payments, the company protected its cash reserves and kept operations stable.
Step 2: Fulfilling the Order and Turning the Invoice Into Immediate Cash
Once the goods were delivered and the customer was invoiced, the company moved directly into Invoice Factoring.
Instead of waiting 30–60 days for the retailer to pay, the distributor factored the invoice and received cash in 24 hours.
This meant:
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The PO finance provider was paid off seamlessly from the invoice proceeds.
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The distributor received the remaining balance as working capital.
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The company now had instant liquidity to take on more orders without slowing down.
PO Financing handled the “before delivery” cash crunch, and Invoice Factoring handled the “after delivery” cash-flow gap. Together, they kept the company’s growth cycle running smoothly.
PO Financing and Invoice Factoring Results: A Stronger Cash Position & Scalable Growth
By pairing PO Financing with Invoice Factoring, the distributor:
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Fulfilled a large order without using internal cash
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Avoided production delays that could have lost the sale
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Received immediate working capital after invoicing the customer
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Gained the financial ability to accept more large orders
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Built a repeatable system for managing future growth
This combination didn’t just solve a one-time issue — it permanently improved the company’s cash-flow strategy.
*Cash Flow Management Resources
Why This Combined Strategy Works So Well
PO Financing solves the problem of “How do we get the product to fulfill the sale?”
Invoice Factoring solves the problem of “How do we keep cash flowing after the sale?”
When used together, they turn cash-hungry growth into sustainable expansion. Companies that regularly face long supplier lead times, large orders, or slow-paying customers benefit most from this two-step funding model.
Why First Capital Is the #1 Source for PO Financing & Factoring Nationwide
When companies need fast, flexible funding without jumping through bank hoops, First Capital is the go-to choice. With years of experience financing both purchase orders and receivables, First Capital makes it simple for businesses to:
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Secure inventory for large confirmed orders
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Convert invoices into same-day cash
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Maintain strong cash flow during high-growth periods
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Scale operations without taking on debt
If your business has orders to fill but needs capital to make it happen, contact First Capital today for fast, affordable working-capital solutions.