Quick answer
For purchase order finance, lenders usually want the signed purchase order, your supplier's quote or pro forma invoice, your customer's details and payment terms, a simple deal costing that shows your margin, recent bank statements, ID and ABN or company details, and evidence you've delivered similar goods before. The order and the customer matter most, because the funder is repaid from the customer's payment.
Key points
- The signed, firm purchase order is the centrepiece: quantities, prices, delivery dates and acceptance terms must be clear.
- Your supplier's quote and terms show the funder exactly what it will be paying, to whom and when.
- A one-page deal costing proves there's enough margin left after funding costs.
- Large customers' payment habits can be checked on the free government Payment Times Reports Register.
- Having everything ready before you enquire is the single biggest thing you control about speed.
For purchase order finance you’ll typically need the signed purchase order, your supplier’s quote or pro forma invoice, your customer’s details and payment terms, a short costing showing your margin, recent bank statements, ID and business registration details, and proof you’ve handled similar goods before. The order and the customer carry the most weight.
That list looks simple, but each document answers a specific question in the funder’s head. Understand the question and you’ll know exactly what “good” looks like, which is what turns a slow back-and-forth into a quick yes or no.
Why does a purchase order funder need different paperwork from a normal lender?
A standard business lender mostly asks one question: can this business repay from its own cash flow or its security? A purchase order funder asks three:
- Will your customer pay? The funder is usually repaid from your customer’s payment, so the customer’s reliability matters more than almost anything about you.
- Will your supplier deliver? The funder’s money goes to the supplier first. If the goods don’t arrive, or arrive wrong, there’s nothing to invoice.
- Can you run the deal? You’re the one co-ordinating the order, so the funder wants evidence you’ve done something similar, even at a smaller scale.
Every document on the checklist maps to one of those three questions. The purchase order finance page covers how the product works end to end. This guide stays on the paperwork.
What documents prove the order is real?
The purchase order itself. This is the centrepiece. A funder looks for:
- the customer’s full legal name and ABN, not just a trading name
- a description of the goods precise enough to match the supplier’s quote
- quantities, unit prices and the total
- delivery date, delivery location and who pays freight
- acceptance or inspection terms (how the customer confirms the goods are right)
- payment terms, such as 30 or 60 days from invoice
- any cancellation, variation or penalty clauses
The fewer escape hatches the customer has, the stronger the order. A letter of intent, a forecast or an “expect to order” email generally won’t be accepted, because none of them obliges the customer to take and pay for the goods.
The customer contract or supply agreement, if there is one. Large customers often issue purchase orders under a master agreement that holds the real terms, including cancellation rights. If the purchase order refers to “standard terms”, get a copy of those terms.
Evidence of the customer relationship. Earlier invoices to the same customer, or correspondence showing how the order came about, help a funder see this isn’t a one-off that appeared from nowhere.
What documents prove the supplier can deliver?
The supplier’s quote or pro forma invoice. It should match the purchase order line for line. Funders look closely at mismatches: a different model number, a different pack size or a delivery date later than the customer’s deadline will all be queried.
Supplier details. Full legal name, ABN or overseas registration, bank details on letterhead, and a contact person. Many funders pay suppliers directly, so they’ll verify the bank account before releasing money.
Supplier terms. Deposit required, balance due, lead time, and whether the supplier sells on retention-of-title terms. That last point matters because a funder that pays your supplier may want its own registered interest in the goods. The PPSR explains that a purchase money security interest over inventory has to be registered before the grantor takes possession, so the funder will want the supplier’s terms early, not the day the container lands.
Your history with the supplier. Past invoices showing you’ve bought from them before, on time and to spec, are worth more than a glossy supplier brochure.
What documents prove the deal makes money, and that you can run it?
Most funders want a simple costing, often just one page. It doesn’t need to be fancy, but it must be honest.
| Line | What to include |
|---|---|
| Sale value | Total from the purchase order, excluding GST |
| Cost of goods | Supplier’s price, plus any deposit and balance |
| Freight and insurance | Inbound and outbound, including any customs or port costs |
| Packaging and labelling | Anything the customer requires that the supplier doesn’t provide |
| Funding costs | An estimate of the funder’s fees for the time the money is out |
| Margin left | What remains for your business |
If the margin left is thin, the funder will worry that a small delay or freight increase wipes it out. It’s better to find that out yourself first, because some orders are worth taking for the relationship and some simply aren’t worth funding.
Then the documents about your business itself:
- Recent business bank statements, commonly the last six months, sometimes more.
- Identification for directors or owners, and ABN or ACN details.
- Your latest financial statements or BAS, more likely for larger deals.
- Proof of previous similar deliveries: invoices, delivery dockets or customer references.
- A short summary of the business: what you sell, who to, and how long you’ve been doing it.
The business.gov.au checklist for applying for a business loan is a handy general list of ID, financial reports and forecasts; a purchase order funder uses a narrower version of it, weighted towards the deal itself.
If you’ve got the order in hand and most of this list ticked off, start an enquiry now and we’ll tell you what’s missing on the first call.
How can you check your customer before the funder does?
If your customer is a large business, you can do some of the funder’s homework for free. The Payment Times Reporting Scheme requires large businesses to report how and when they pay their small business suppliers, and the Payment Times Reports Register can be searched by anyone, with no account needed. You can look up a reporting entity’s standard payment terms and actual payment times.
Why bother? Because your funding cost depends on how long the money is out. If the purchase order says 30 days but the register shows the customer typically pays much later, plan your costing around the slower number. Funders will often do the same check, and it looks good when you’ve already allowed for it.
For smaller customers, a credit check by the funder, trade references and your own payment history with them will do the job.
Illustrative example: a hospitality supplies reseller
Illustrative only. A reseller of commercial kitchen consumables wins an order from a regional hotel group for $180k of branded tableware, delivered in six weeks on 45-day terms. Its usual supplier wants $110k, half up front.
Before enquiring, the owner gathers the hotel group’s formal purchase order and its supply terms, the supplier’s pro forma invoice with matching product codes, three earlier invoices to the same supplier, two earlier invoices to a smaller hotel customer, six months of bank statements and a one-page costing. She checks the costing at the hotel group’s realistic payment speed rather than the 45 days printed on the order.
The funder has nothing to chase. It verifies the order with the hotel group, confirms the supplier’s bank details and moves to approval. The goods are delivered, invoiced, and the deal rolls into invoice finance until the hotel group pays.
What slows purchase order finance down most often?
- Purchase orders with open cancellation rights. If the customer can walk away, the funder carries the risk. Our guide on what happens if a financed order is cancelled goes into this.
- Supplier quotes that don’t match the order. Fix mismatches before you send anything.
- No track record. If you’ve never delivered anything similar, read our guide to purchase order finance for a new business.
- Missing supplier terms, especially retention-of-title clauses.
- A costing that ignores freight or funding fees.
When the order is small relative to your turnover, the simpler route may be a working capital or unsecured loan instead; the secured or unsecured tool helps you see which way you lean.
Paperwork sorted? See whether your order can be funded
If you’ve pulled together the order, the supplier quote and your bank statements, you’ve done the hardest part of any purchase order deal, and you’re already ahead of most applicants. The next step is quick: tell us about the order, the customer and the supplier in an enquiry that takes about 60 seconds.
Enquiring comes with no credit check at this stage. Your deal stays with us instead of being shopped around to every lender in the country, so the only follow-up comes from our team. Someone experienced reviews the order itself, not just a score, and rings you to talk through the options, which may also include unsecured funding typically between $5k and $500k, or a property-secured loan from $20k to $5m. Please fill the form in accurately, with the real order size and timing, so we can match the right structure first time.
Frequently asked questions
Is an email from my customer enough as a purchase order?
Sometimes, if it clearly states the goods, quantities, prices, delivery terms and that it's a firm order. Most funders prefer a formal purchase order on the customer's own system or letterhead. A letter of intent or an 'expect to order' email usually isn't enough.
Do I need financial statements for purchase order finance?
Usually something, but less than for a standard loan. Because the funder relies mainly on your customer paying, recent bank statements and basic business details often carry more weight than full-year accounts. Bigger deals may need your latest financials.
Will the funder contact my customer?
Often, yes. Many funders verify the order directly with the customer, and some need the customer to pay into a nominated account. Ask early how verification works so you can warn your customer and keep the relationship smooth.
What if my supplier is overseas?
Expect extra documents: the supplier's company details, shipping terms, the proposed shipping schedule and sometimes inspection arrangements. The funder may pay through a letter of credit or a direct transfer once shipping documents are produced.
Can I use purchase order finance for a government order?
Government orders are often attractive to funders because the buyer is reliable. You'll still need the formal purchase order or contract, delivery and acceptance terms, and the agency's payment terms.
How quickly can I get the documents together?
If the order, supplier quote and bank statements are already in hand, most owners can assemble the pack in a day or two. The slowest items tend to be supplier details and proof of past deliveries, so start there.