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How to Get a Purchase Order Finance in TAMILNADU?




Know your loan eligibility

Wondering how much you can borrow? We can help you with that. Your loan amount is determined by your Fixed Obligations to Income Ratio (FOIR) or Debt-Service Coverage Ratio (DSCR) or Self Assessment Ratio implemented by banks and Financial Institutions. Reach out to us, so you can find out your loan eligibility quickly.

Get your In-Principle Approval (IPA)

Gone are the days when you’d have to visit banks for your In-Principle Approval. We’ve streamlined the process to make it easier and faster for you to get one. Simply gather the required documents, submit everything to us and wait for approval.

Apply for Purchase Order Finance

Once you get your IPA, you’re all set for the next step – getting the best Purchase Order Finance in TAMILNADU. With the help of our knowledgeable Purchase Order Finance Loan Specialists, you can be confident that you’ll be getting the highest cash out amount at the lowest interest rates.

What is Purchase Order Finance?

Purchase order finance is raw-material procurement, with the help of an external source that makes payment for the purchase order. In this scenario, the external source is a third party which is usually an Banks/NBFCs that makes payment basis an approved business loan or credit line. Despite being a fairly new concept, Purchase Order Finance has grown tremendously in the last few years after witnessing its benefits for the SMEs.

Problems faced by SMEs

Small and medium-sized businesses are often pulled in to the vicious cycle of delayed payments. This results in limited cash-flow in their system for raw-material purchase. Purchase Order Finance is targeted to eliminate the problems faced by growing SMEs; of difficulty in procuring the raw-material due to limited working capital availability. Accordingly, Banks/NBFCs have designed unsecured business loans and credit lines to meet short-term requirements of SMEs, without demanding any collateral. A lot of SMEs are also first time entrepreneurs. They try and manage the entire functions single handedly for obvious reasons, but due to the lack of expertise especially in financial matters, they end up overshooting their on paper budget in the real life action mode. This further can disrupt their inventory buying cycles and taking care of other monthly operational expenses like infra running cost and employee salaries etc. Let’s say, they pass this early stage and mature to manage these finances well in some time after their learning cycles. Once they in the second stage which is the growth stage, they do have the command on their finances, but now they need more working capital to grow their business further. At this stage, it’s very important to have help coming in the form of Purchase Order Finance from institutions like Banks/NBFCs offering unsecured business loans.

Features of Purchase Order Finance

Banks/NBFCs are trying to solve this problem by letting SMEs raise working capital for bulk raw-material purchasing. Some of the key-features of Purchase Order Finance include:

Easy Access

Unsecured business loans and credit lines offered by Banks/NBFCs for Purchase Order Finance are easy to access, and offer quick solutions for short-term operational requirements.

Quick Capital Arrangement

Unsecured business loans or credit lines required for Purchase Order Finance are typically approved within 3-5 days of document submission by Banks/NBFCs. This is helpful in raising capital at short notice and prevents any operational delays. Most of the SMEs face last-minute working capital issues due to limited planning and management. Thus, Purchase Order Finance is helpful in keeping the company running seamlessly without any hassles.


Purchase Order Finance was introduced mainly to help solve raw-material shortage problems of emerging SMEs. To prevent sudden operational delays, SMEs with limited or no collaterals can opt for Purchase Order Finance as it does not require a loan. Credit lines offered by Banks/NBFCs are specifically designed to offer best price and quick approval in addition to offering access to collateral-free capital.

Working Capital up to 2 Crores

Banks/NBFCs offer working capital of up to 2 Crores for Purchase Order Finance. Credit lines offered by Banks/NBFCs require SMEs to pay interest only on the used amount and only for the time period that it was used. This is helpful for SMEs looking for short-term budget solutions.

Benefits of Purchase Order Finance

Better material costs

Purchase Order Finance gives power to SME’s in the sense that it offers ready cash to SMEs and thus help SMEs negotiate better with the supplier by offering on-the-spot payment and save on interests. SMEs can save up to 3% on bulk raw-material purchasing, if negotiated well.

Savings on interest payouts

Banks/NBFCs charge an interest-rate of 1.4 to 1.6% per month on the used amount and for the used period. This interest-rate is 1% per month lower, when compared with traditional lenders. Thus, SMEs using Purchase Order Finance for bulk raw-material procurement can also save on interest payouts of up to 3% over a period of 90 days.

Wide range of products

Banks/NBFCs are also helping SMEs procure bulk raw-material at competitive prices from their strategic partners. This is helping SMEs source quality raw-material for their business and get it delivered to any location in a hassle-free manner. Some Banks/NBFCs offers bulk raw-material purchasing for TMT, steel bars, polymer, textile, cement etc.

Purchase Order Finance is a strategic solution for SMEs to ensure smooth operations and minimize production delays. The idea has evolved over the past few years and is certain to grow more with the humongous opportunities being offered to SMEs. From savings on interest payouts to better sourcing, Purchase Order Finance offers it all-in-one.

If you are an SME, interested in getting working capital, please feel free to reach out to us at +91-90470 45470 or email to

Prominent features

Lower interest rates & Flexibility
  • Pay suppliers upfront and get cash discounts
  • Lower rate of interest
  • Interest as per usage
  • No pre-payment charges
  • Save up to 6% on finance
Unsecured credit
  • No collateral/Guarantor Required
  • Unsecured Credit upto 2 Crores
Hassle Free
  • Minimum Documentation
  • Doorstep Service
How to save up to 6% on Purchase Order Finance?
Save up to 3% via our Unsecured Credit Lines

As a practice, SME’s procure bulk raw material on 90 days credit period. Traditional distributors charge up to 2.5% monthly for providing unsecured credit to SMEs. Most of the times, finance costs are hidden within the raw material prices which leads to increased raw material prices.

Banks/NBFCs offers customized credit lines as per business requirement at 1.5% per month effectively, helping SME’s save up to 3% over a 90 day credit period, every time. In fact, the cumulative savings for the entire financial year are far higher.

Save another 3% on material purchase?

By using OfBusiness’ credit lines, SME’s can negotiate with existing suppliers in terms of immediate payments on delivery or in advance. By doing this SME’s save upwards of 3% on their purchase orders on a commitment for upfront payments.

SMEs’s also get best price quotes for their raw material requirements via OfBusiness’s bidding platform. OfBusiness’s technology platform negotiates with more than 100 manufacturers and suppliers across India to get best guarantee prices on bulk raw materials i.e, structural steel, flats, TMT, polymer, paper & cement. Our strong PAN India presence and aggregate demand help us fetch volume discounts which in effect helps SME’s save another 3%.

A combination of the above savings coupled with the entire credit risk enables SMEs to expand faster and efficiently.

Talk to our committed Purchase Order Finance expert today to get the best price quote for raw materials or understand how we can associate better. Call us at +91-90470 45470 or mail to

Every PO funding transaction stands on its own. We look at your business history, the credit worthiness of the buyer, the ability of your supplier to produce the goods, and if the transaction is profitable for all parties.

Business History

We consider purchase order finance for those companies with a track record of producing goods. Your company may be young or a startup, but your company management must have a proven track record of producing goods.

Buyers Purchase Order

Your buying firm must be reputable with a good credit line. The purchase order for factoring must be verifiable.


Your suppliers must know your product and be able to produce it in time and to meet your buyer’s terms. The supplier must be a firm with a good business history and track record of producing goods.


The transaction after all expenses must make a profit for all parties. Payment of the money lent to support the transaction can come from any number of sources such as factored receivables.

Finished goods are easier to Finance than non-finished goods. J&D finances both types.

Purchase Order Finance is available only to qualified customers. PO factoring or finance falls into two types:
  • Finished Goods
  • Non-Finished Goods
Finished Goods

Finished Goods refer to transactions where the goods are never touched by you. Usually, these goods go directly from your supplier to your buyer. You never take direct possession.

Non-Finished Goods

Non-Finished Goods are when you, the seller, take possession of the goods either in a raw state or a semi-finished state. In either case you must take possession of the product.

Finished Goods are easier to finance than Non-Finished Goods. We will need to assess your ability to complete the transaction in processing the goods for the final shipment to your buyer. J&D Financial Corporation provides purchase order factoring for both Finished and Non-Finished Goods.

In order to consider purchase order finance for your firm we will need:
  • A Completed PO Factoring Application Form
  • Your invoice to buyer
  • Your supplier’s invoice
  • Your purchase order to your supplier
  • Profit on transaction – gross margins >18% – see work sheet
  • Business History
  • P&L (most recent 2 years)
  • Balance Sheet (most recent 2 years)
  • Time frame to produce goods
  • Credit information on your buyer
  • Supplier Information
  • Finished Goods or Non-Finished Goods
Who Uses PO Finance & When?

There are many situations where purchase order finance might be right for your business. Each is centered on the need for cash to make purchases from suppliers that you can’t afford, but need in order to fulfill a customer’s order. Companies that use purchase order finance include:

  • Distributors
  • Wholesalers
  • Resellers
  • Importers or Exporters of Finished Goods
  • Outsourced Manufacturers
Purchase order finance can help you with various scenarios that include
Seasonal Sales Spikes:

At the beginning of a seasonal sales spike you may receive purchase orders that exceed your existing working capital.

Substantial Growth:

If your sales growth is outpacing existing small business lines of credit due to growth then you may be a good candidate for PO finance.

Consistently Tight Cash Flow:

Many small businesses have consistent cash flow problems at specific points of the month on a consistent basis.

How Purchase Order Finance Works?

Purchase order finance involves a minimum of four different parties who can complicate it at different points in the process. These parties are:

The borrower:

This is the one seeking finance.

The PO finance company:

This is the company providing the finance.

The supplier:

This is the company that supplies the goods which the borrower resells or distributes.

The customer:

This is the borrower’s customer who they sell to directly.

Each party involved can make it more difficult for you to complete the finance process, and can prevent you from keeping your costs down. For example, if your suppliers are slow to manufacture goods then you could be paying extra for the length of time it takes them to supply the goods. And if you’ve promised your customers terms on their payments then you could be looking at additional costs as well because the longer it takes for your finance company to be paid the more expensive your loan gets.

Steps to purchase order finance
  • The borrower receives a large purchase order from their customer.
  • The customer gets a written proposal from their supplier on what it would cost to purchase the goods necessary to fulfill the customer’s order. At this point, if the customer doesn’t have the available funds necessary to fulfill the order then they seek outside finance.
  • The borrower finds the right PO finance company, applies for the funding they need, and gets approved. In order to apply you will need to provide both the customer’s purchase order and the supplier’s proposal.
  • Once the borrower is approved, the PO finance company pays the supplier, through a letter of credit, to manufacture and deliver the goods needed to fulfill the purchase order.
  • The supplier delivers the goods to the customer directly, or delivers them directly to the borrower if they have a different delivery method they prefer. Once the customer receives the goods they must accept the order.
  • The borrower invoices their customer for the goods and either demands immediate payment or gives them net terms. The longer it takes to receive payment from the customer, the more expensive the finance becomes.
  • The customer pays the PO finance company directly for the full price on the borrower’s invoice.
  • The PO finance company deducts their fees from the funds and then pays the remaining balance to the borrower.
Purchase Order Finance Qualifications

It’s pretty easy to qualify for purchase order finance as long as you deal with established, reputable customers and suppliers. Even newer businesses can qualify if you have verifiable industry experience.The most important qualifications are that you’re a B2B or B2G business that sells tangible goods with a minimum of 15% profit margins. And that your supplier and customer involved in the transaction are creditworthy.

Profit margin is the one requirement that varies the most between finance companies. We’ve seen the minimum requirement as high as 25%, but typically it is set at 15% or 20%. The profit margins are calculated per transaction by using your customer’s written purchase order and your supplier’s written invoice.

Purchase Order Finance Eligibility

The eligibility criteria for you to avail Purchase Order Finance depend on the following factors:
Loan type Purchase Order Finance
Loan Amount Rs 10 lakhs – Rs 2 crores

Minimum: 25 Years

Maximum: 65 Years

Eligible profiles
  • Importers or Exporters of Finished Goods
  • Outsourced Manufacturers
  • Manufacturers
  • Distributors
  • Wholesalers
  • Resellers
Tenure Up to 20 Years
Purchase Order Finance - Advantages and Disadvantages:

Before weighing the pros and cons of inventory loan, it is prudent to take a look at its redeeming features.

  • It unlocks blocked funds in inventory.
  • Enhance inventory as well as support liquidity.
  • Funding between 90% and 100% of the inventory value.

With such inherent benefits of seeking inventory finance for small business, it is also vital to look at all the pluses and minuses of such loans.

  • Short term advance loan for inventory purchase is an ideal solution to grow your stock to help generate healthy sales. A mobile business cycle of stock and sales are complementary to each other and the health of the business.
  • The Purchase Order Finance does not entirely stipulate the nature of fund use. A business can gain substantially by using an additional capital to expand product lines and equip sales channels to increase business opportunities.
  • It offers avenues to small and medium businesses to seek finance which is otherwise ineligible for traditional loans.
  • Being a short term credit, it may not meet the long term needs of the business. The repayment of an Purchase Order Finance loan is tied up with the life span of the inventory at hand.
  • It is suitable only to small businesses and is not particularly suited to the needs of large enterprises.

Purchase Order Finance Documents and Charges

For Self Employed Non Professionals (SENP - Business):
Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Employer ID Card/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Business Proof:
  • Professional Tax Receipt or SSI Certificate or Company’s RC (TIN No) Copy or Any other old business proofs
  • GST Certificate copy
Income Proof:
  • Latest three Financial Year’s (FY) Income Tax Return copies with full set (with auditor seal & sign)
  • Bank account statements for all the bank accounts (SB/Current/OD/CC) owned by the applicant for the last one year
Other Documents:
  • Your invoice to buyer
  • Your supplier’s invoice
  • Your purchase order to your supplier Time frame to produce goods
  • Credit information on your buyer
  • Supplier Information
  • Finished Goods or Non-Finished Goods
For Co-Applicant (if needed):
Identity Proof (any one):
  • PAN
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License or Electricity Bill or Water Tax or Property Tax or Aadhaar Card or Telephone Bill or Valid Passport or Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs

*Requirement of purchase loan documents might vary according to the scheme chosen. Banks/NBFCs may require additional purchase loan documents which will be intimated to you while processing your application.

Purchase Order Finance Interest Rates

Compare the lowest purchase order Finance interest rates starting from 18% p.a. and apply for the best purchase order finance. Get the complete list of current purchase order finance rate of interest in India from all leading banks and financial institutions.

Purchase Order Finance
Bank/NBFCs Interest Rate (%) Processing Fees (%) Tenure (yrs.)
min max min max min max
Ofbusiness 18 19 2 2.5 1 1
Neogrowth 21 24 3 3 1.5 3
KaptitalTech 22 26 3 3 1 3
Samunnati 19 24 2 2.5 1 5

FAQs on Purchase Order Finance

Open all
Do I need to go to a Banks/NBFC branches to get Purchase Order Finance?

No, there is no need to visit Banks/NBFC branches to apply for Purchase Order Finance. We have made the process simple; you can apply for Purchase Order Finance through our website.

You can submit required details through our website and we will call you back and let you know about eligibility and application status. BankVallet will have the necessary documents picked up from your residence or office.

If you have any questions regarding Purchase Order Finance application process, please feel free to contact our customer care at 90470 45470 or write to us at

How secure is my information when I provide it during the loan comparison process?

All your sensitive information like personal/financial information is encrypted and safeguarded with our best in class security systems. We don't share your information with any marketing agencies or any 3rd party without your consent.

How long does it take to get Purchase Order Finance?

At BankVallet, we have simplified the process of obtaining Purchase Order Finance. You can visit our website and apply for the loan by submitting your details. We will call you back and notify you if you are eligible. Thereafter, you can submit your documents to our representative who will visit either your home or office as per your convenience. We strive to process the complete application within 72 hours of complete document submission. If you have any questions regarding Purchase Order Finance application process, please feel free to contact our customer care at 90470 45470 or write to us at

How will Banks/NBFCs determine my Purchase Order Finance eligibility?

There are a number of factors that are taken into consideration before we approve your application for a Purchase Order Finance. These include:

  • Your age: You should be at least 23 years at the time of loan application and maximum 65 years of age at the time of loan maturity.
  • Your work experience: Banks/NBFCs require self-employed individuals should have been in business for at least 3 years.
  • Good credit rating: Banks/NBFCs examine your CIBIL record; They extend credit to individuals and entities with a good credit rating.
How does the rate of interest for a Purchase Order Finance differ from a traditional loan?

Normally, the rate is higher than traditional term loans.

Where can one seek Purchase Order Finance in India?

In India Banks, NBFCs and Digital NBFCs extend Purchase Order Finance.

What is the form of repayment of the loan?

It is flexible, and the business needs a bank account to service the loan.

How is the Purchase Order Finance amount processed?

On submission of all requisite documents along with the application to the lender, the Purchase Order Finance in hand is valued for arriving at the loan amount.

How is the loan terms fixed?

The loan tenure is determined by the type of loan, In the case of line of credit, submission of periodic stock value statement is needed for fixing of the borrowing limit.

A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.

How To Apply for a Purchase Order Finance


Compare the best Purchase Order Finance packages

At BankVallet, we give you an overview of the latest Purchase Order Finance packages available in the market. With just a few clicks, you’ll be able to compare the best interest rates from our Banks and Financial Partners.


Get in touch with our Purchase Order Finance Specialist

From knowing your loan eligibility to getting your IPA, we’ll fill you in with all the pertinent details regarding Purchase Order Finance. Our Purchase Order Finance Specialists will help you throughout the process and give you unbiased advice.


Apply for your Purchase Order Finance

Once you have your IPA, we can get started with your Purchase Order Finance application. We understand that this is a major life decision and we’re here to guide you. With our help, the Purchase Order Finance application process can be completed within 2 working days. Although, some banks and financial institutions may take up to a week to complete.

Why Get Your Purchase Order Finance Through Us?

Simple, Fast, Convenient

Leave your Purchase Order Finance research to us and we will break it down for you in simple terms. Our Purchase Order Finance Specialist will contact you directly so you can save time for other important things in life.

We compare so you get better deals

Feeling so spoilt for choice you cannot decide? Settling for the first option is like being forced to marry the first person you come across on a matrimony app. Don’t feel pressured. We compare across all banks in TamilNadu to ensure that you get the best deals.

Most importantly it's free!

Our service to you is free. But, of course we are not doing this for charity! All banks pay us a standard referral fee for our services and our awesome job done. We don’t take sides or give biased advice.

We have helped thousands of Tamilnadu consumers choose and apply for their Purchase Order Finance

BankVallet team staffs are very responsive and knowledgeable. I got my invoice funding loan from Neogrowth on previous week. Low rate of interest and processing fee.

S.m.senthil Vel
Employed full time

Very kind and helpful loan service. I availed my purchase finance loan from HDFC Bank. BankVallet team members clearly explained all details about the loan and they helped end to end loan process. I am really very happy to avail their free loan service. I strongly recommend bankvallet!

Sathya R
Employed full time

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text.Positive response, fast and transparent loan service team. I got my raw material purchase loan from Yes Bank with huge support of BankVallet. They are very kind and helpful.

G Venkatesh
Employed full time

We Work with All Major Purchase Order Finance Providers