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] 


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