Purchase Order Discounting
A number of organisations make use of third parties to provide some of the items required in their businesses and set out specifications of items needed either in a contract agreement document or a Local Purchase Order (LPO). These third parties or “contractors” or “suppliers” often require financial assistance to execute such supply contracts. Examples of Companies that may require LPO/Contract Financing • Suppliers to oil majors and oil servicing companies • Contractors to reputable manufacturing companies and FMCG companies • Suppliers to construction giants • Contractors to reputable telecoms companies
What does it offer you:
- Provides working capital to execute the contract
- Timely execution of the contract as a result of the access to funds.
- No need to provide tangible collateral
- Opportunity to deliver a job if the business is in a tight cash position.
- The repayment of the loan is tied to the receipt of the payment for the contract.
- Only purchase orders from blue chip companies are acceptable for financing.
- Financing of up to 80% of the value of the purchase order.
- Domiciliation of proceeds with the bank.
What you need to apply:
- Formal application letter
- Board resolution (if a limited liability company) approving the request
- Duly accepted offer letter
- Duly executed irrevocable domiciliation agreement for the full LPO value of the contract into a collections account
- Copy of supply order/contract document
- Copy of goods/product invoice from supplier
- 12 months’ bank statement (for new to bank customer)
- Satisfactory credit bureau report
- Duly executed statement of personal guarantee of company owner(s)
- Work order/contract duly verified by the collections monitoring unit (CMU).
For more information:
Please visit a Stanbic IBTC Bank branch near you or call 0700 CALL STANBIC (0700 2255 7826242) or +234 01 270 9676 or email [email protected]