PO financing cost calculator

When a retailer sends you a signed purchase order, Spring pays your supplier directly for the goods, freight and 3PL behind it, so production can start without you fronting the cash; orders can flow in automatically from your PO system or EDI such as SPS Commerce. When you ship and invoice, invoice factoring covers the remaining share up to your retailer's advance rate, and the retailer's payment to Spring closes both. You need a US business with at least $1M in annual revenue, a signed PO from an approved retailer and a supplier Spring can pay. See purchase order financing.

Yes, and it is routine. Factoring runs on a Notice of Assignment (NOA): a short letter telling your retailer's accounts-payable desk to send payments on your financed invoices to a collection account Spring holds for that relationship. It changes one line in the retailer's vendor file (the remit-to), not your prices, terms or product, and it is one notice per retailer, not per invoice; Walmart, Target, Costco, UNFI and KeHE each have a routine desk and form for it. A retailer has to be set up before its first invoice is funded, which is why a first funding takes longer than repeat ones. Full explainer: What is a NOA?.

At Spring, purchase order financing costs 12% to 36% a year, charged only for the days the money is out, and your offer states the exact rate before you accept. The cost is the amount funded, times the yearly rate, times the days out of a 365-day year. On a $100,000 order out for 90 days, that is about $2,959 at 12% and $8,877 at 36%. The PO financing calculator works it out for your own order.

From the day you pay your supplier to the day the retailer pays you: production lead time plus the retailer's payment terms. A run that takes 30 days to make and ship, sold on net 60 terms, ties up its cost for about 90 days, longer if the retailer pays late or takes deductions first. Purchase order financing covers the production half and invoice factoring the wait after you ship, and the retailer's payment settles both.

Usually not, once you count the time. A flat 10% fee repaid in 13 weekly debits works out to about 72% a year, because repayment starts in week one, before the order has earned anything. Spring charges 12% to 36% a year for the days the money is out, and your retailer's payment settles it in one go. To compare two offers, turn each into a yearly cost for the same amount and the same days; see Spring vs revenue-based financing.