Quick answer
Yes, a new business can sometimes get purchase order finance, because funders rely mainly on the customer paying and the supplier delivering rather than years of trading. They'll still want a firm order from a creditworthy customer, a proven supplier, a healthy margin and evidence the owners know the product. Very new businesses with no track record at all often need to add security, such as property, or start with a smaller order.
Key points
- Funders lean on your customer's credit and your supplier's reliability, which helps young businesses.
- Industry experience from a previous job can partly stand in for business trading history.
- A strong supplier with a delivery record matters more when you have none of your own.
- Property security or a smaller first order are the usual ways to bridge a thin track record.
- The ABN date isn't the whole story; the story behind the deal is.
Yes, a new business can sometimes get purchase order finance. Funders rely mostly on your customer paying and your supplier delivering, so a short trading history isn’t automatically a deal-breaker. They’ll still need a firm order, a creditworthy customer, a proven supplier, a solid margin and owners who clearly know the product. Thin history often means adding security or starting smaller.
That makes purchase order finance unusual. Most business lending starts with “show me two years of figures”. This product starts with “show me the deal”. For a young business that has just landed a big customer, that difference can be the whole game.
Why is purchase order finance friendlier to new businesses than most loans?
A typical unsecured business loan is sized on your turnover and bank statements. If you’ve only been trading for a few months, there isn’t much to size it on. Purchase order finance works differently. The funder pays your supplier, the goods go to your customer, and the funder is repaid from the customer’s payment.
So the funder’s biggest questions are about other people:
- Is the customer good for the money? A national retailer, a government agency or an established distributor carries far more weight than your own balance sheet.
- Can the supplier deliver on time and to spec? An experienced manufacturer with a history of supplying similar goods reduces the risk sharply.
- Is the order firm? A non-cancellable order with clear terms gives the funder a dependable repayment source.
Your business still matters. You’re the one co-ordinating the deal, and you’ll usually be liable if it goes wrong. But the weight shifts, and that’s what opens the door for newer businesses.
It also explains why the product suits some young businesses far better than others. It works best when you’re buying finished goods and passing them on with little change: resellers, distributors, importers and brand owners using a contract manufacturer. It’s much harder when you’d have to make the product yourself, because there’s more that can go wrong between the funder paying and the customer accepting. And it doesn’t suit services at all, since there are no goods for the funder to hold. If your business sits in that harder group, the alternatives later in this guide are likely to be a better starting point.
What do funders look for when your trading history is thin?
When there’s less history, a funder looks harder at everything else. Here’s how the assessment tends to shift:
| What a funder checks | Established business | New business |
|---|---|---|
| Track record | Past deliveries and financials | The owners’ industry experience and past roles |
| Customer | Credit check and payment history | Same, often in more depth, plus how the order was won |
| Supplier | Your history with them | The supplier’s history with similar buyers, references, factory checks |
| Margin | Compared with past deals | Must be clearly healthy, with room for surprises |
| Security | Often the goods and invoices | Goods and invoices, plus possibly property or a director’s guarantee |
| Size of deal | Relative to turnover | Relative to the owners’ experience and any security |
The theme is simple: anything that makes the deal look predictable helps. A first order that’s ten times bigger than anything you’ve done, with a supplier you’ve never used and a customer you met last month, is going to struggle. The same order with an experienced supplier, a customer you’ve already sold to in small quantities, and owners who spent years in the industry is a very different proposition.
Does your experience before the business count?
Yes, and it’s often the most important thing a new business can bring. Funders want to see that someone in the business understands the product, the customer’s expectations and the supply chain.
Useful evidence includes:
- a short CV showing years in purchasing, sales, logistics or production in the same field
- the history of how you won the customer, especially if you dealt with them in a previous role
- any smaller trial orders, samples or pilot deliveries you’ve already completed
- references from the supplier about how long they’ve known you
business.gov.au’s advice on applying for a business loan stresses that lenders usually want to see a business plan with a clear path to success. For a new business using purchase order finance, a two-page plan that explains the customer, the supplier and why you’re the right person to connect them often does more than a long document.
How can you make a first big order fundable?
Check your customer’s payment habits. If the customer is a large business, the free Payment Times Reports Register shows how large businesses report paying their small business suppliers. Plan your cash and costing around how they actually pay, not just the terms on the order.
Lock down cancellation terms. Ask the customer for a firm order with clear acceptance terms. If they want the right to cancel, try to limit it to before production starts.
Pick a supplier with a record. A new business paired with a new supplier is the hardest combination to fund. If your preferred supplier is untested, consider a better-known one for the first order.
Protect your own position. If you’ll sell to the customer on retention-of-title terms, register your interest. The PPSR’s guidance for wholesalers explains that an unregistered supplier may be treated as an unsecured creditor if its customer becomes insolvent.
Get your paperwork ready. Our purchase order finance documents guide lists what funders typically want, and why.
If you’ve landed the order and want to know whether it’s fundable as a young business, start a quick enquiry and a real person will tell you how it looks.
What if a funder says your business is too new?
You still have options. The most common are:
- Property security. If the owners have equity in a home or commercial property, a property-secured business loan from $20k to $5m can fund the supplier directly. It’s assessed on the property and the deal rather than on years of trading. Our home equity business loans page explains how that works.
- A smaller first order. Agree with the customer to split the order into stages. The first delivery builds your track record, and its payment funds part of the next.
- Supplier terms. Some suppliers will extend credit or reduce the deposit for a customer with a firm order from a well-known buyer.
- Customer deposits. Some customers will pay a deposit on a large custom order, especially if it guarantees their supply.
- New business loans. Some lenders consider newer businesses on a mix of owner experience, security and early trading.
The secured or unsecured tool is a quick way to see which direction suits your situation.
Illustrative example: a six-month-old safety equipment reseller
Illustrative only. Two former employees of a safety equipment distributor start their own reseller. Six months in, they win a $150k order for high-visibility workwear and protective gear from a civil construction firm they used to look after in their old jobs. The supplier, a manufacturer they’ve dealt with for years, wants $90k before production.
The business has little trading history, so a purchase order funder looks closely at the rest. The construction firm has a strong payment record, the order is firm with clear acceptance terms, and the supplier confirms it has made similar goods for the founders’ former employer. The founders provide CVs, two smaller invoices to the same customer and a costing that still leaves a healthy margin after fees.
The funder approves the deal with a director’s guarantee. The goods are delivered, the invoice is paid, and the business now has a completed large order to point to next time.
Your first big order deserves a real look
Landing a major customer early is a huge milestone, and it shouldn’t be lost just because your ABN is young. The right structure depends on the customer, the supplier, your experience and whether property is available, and that’s exactly what we look at.
The enquiry form takes about a minute, and enquiring involves no credit check. Your details won’t be farmed out to dozens of lenders. Instead, a real person reads about your order and phones you to talk it through, including whether purchase order finance, a property-secured loan or something simpler fits best. Please answer the form accurately, especially the order size and your trading time, so we can match the right option first time.
Frequently asked questions
How long do I need to have traded for purchase order finance?
There's no single rule. Some funders look for a minimum trading period, others will consider a newer business if the customer, supplier and owners' experience are strong. If you have very little history, expect more questions and possibly a request for extra security.
Can a sole trader get purchase order finance?
It's possible, but many funders prefer a company because it's easier to take and register security over business assets. If you're a sole trader and the order is large, talk to your accountant about whether to operate it through a company.
Does my experience in a previous job count?
Yes. A funder wants to know someone in the business understands the product, the customer and the supply chain. Years spent in purchasing, sales or logistics for a similar business can partly make up for a young ABN.
What if the customer is much bigger than my business?
That's normal for purchase order finance, and a large, reliable customer is often the reason the deal works. The funder will still check the customer's payment habits and whether the order is firm.
Can a startup use property to fund its first big order instead?
Yes. If the owners have equity in residential or commercial property, a property-secured business loan between $20k and $5m can fund the order directly, sometimes with fewer moving parts than purchase order finance.