7 ways to fund a large retail purchase order (and how to pick the right one)

A confirmed purchase order from Walmart, Target, Costco, or Dollar General is a growth milestone. It's also an immediate cash crisis. Retailers pay on Net 60 to Net 120 terms, but your co-packer needs 30% to 50% upfront before production starts. A $500,000 PO can require $250,000 in working capital months before you see a dollar from the retailer.

CPG brands that solve this timing gap without giving up equity have seven practical funding options. Each fits a different order size, margin profile, and growth stage. Here's how they compare, what they cost in 2025-2026, and how to choose.

1. Purchase order financing: pay your supplier directly

Purchase order (PO) financing covers production costs by paying your supplier or co-packer on your behalf. The lender underwrites the retailer's creditworthiness, not just your balance sheet, so even early-stage brands with thin financials can qualify when the buyer is a major retailer.

How it works: You receive a confirmed PO from a creditworthy retailer. The lender verifies the SKU, quantity, delivery date, and payment terms, then wires funds directly to your manufacturer. You never touch the cash. When the retailer pays, those funds repay the financing.

Typical cost: 1.5% to 3% per 30-day period, according to Bridge's CPG financing data. On a 90-day cycle, that's 4.5% to 9% total. Crestmont Capital reports a broader market range of 1.8% to 6% per month depending on deal size, supplier risk, and customer credit.

Best for: First-time retail orders, new SKUs with no finished inventory, or brands that can't yet qualify for asset-based lending. Works well when gross margins are 35% or higher and the order is large enough to justify the fee.

2. Invoice factoring: convert shipped invoices to cash

Invoice factoring (also called accounts receivable factoring) lets you sell your unpaid invoices to a factoring company at a discount after goods have shipped. Unlike PO financing, factoring only works post-shipment, once you have an invoice to sell.

The factor advances 80% to 95% of the invoice value within 24 to 48 hours. When the retailer pays the invoice on their normal terms, the factor releases the remaining balance minus their fee.

Typical cost: 1% to 5% of invoice value per 30 days, according to REV Capital's CPG factoring guide. eCapital notes that advertised rates like "starting from 1.95%" often exclude additional fees, so always ask for the all-in cost.

Best for: Brands that have already shipped product and need cash before the retailer pays. Especially useful for bridging Net 90 or Net 120 payment delays. Many brands pair factoring with PO financing: PO financing funds production, factoring accelerates cash after delivery.

3. Inventory financing: borrow against stock you already own

Inventory financing provides a line of credit secured by your existing finished goods, raw materials, or work-in-progress. Unlike PO financing (which funds production of new goods), inventory financing unlocks capital tied up in stock sitting in your warehouse or 3PL.

Lenders typically advance 30% to 50% of the inventory's appraised liquidation value. You repay as inventory sells, and the line revolves so you can draw again as new inventory arrives.

Typical cost: 1% to 4% monthly depending on the collateral type and lender, per Bridge's capital stack analysis. Finished goods with confirmed retail placement command better advance rates than raw materials.

Best for: Brands carrying $200,000 or more in inventory that need working capital without selling receivables or taking on term debt. Works well for seasonal brands building stock before peak demand.

4. Asset-based lending (ABL): a revolving line for growth-stage brands

Asset-based lending is a revolving credit facility secured by a combination of your accounts receivable, inventory, and sometimes equipment. ABL lines grow with your balance sheet: as receivables and inventory increase, your borrowing base expands automatically.

ABL differs from standalone factoring or inventory loans because it wraps multiple asset types into a single facility. This gives you one relationship, one set of covenants, and a larger total credit line.

Typical cost: Prime plus 1% to 3% for well-qualified borrowers (roughly 9.5% to 11.5% APR in mid-2026 rate environments), according to WSJ's business loan rate data. ABL is significantly cheaper than PO financing or factoring on an annualized basis, but requires more financial documentation and operating history.

Best for: Brands doing $2M or more in annual revenue with diversified retail accounts. ABL works when you've outgrown single-transaction financing and need ongoing access to capital that scales with your order volume. Many CPG brands transition from PO financing to ABL as their retail relationships mature.

5. Retailer early payment programs: let the buyer fund your cash flow

Several major retailers offer early payment programs through platforms like C2FO, where suppliers can request early payment on approved invoices in exchange for a small discount. Walmart's early payment program with C2FO lets suppliers select specific invoices, set their own discount rate, and receive payment in as little as 24 hours after acceptance.

Supply Chain Dive reported that Walmart expanded this program specifically to help diverse suppliers overcome access-to-capital challenges.

Typical cost: You choose the discount you're willing to offer, often 1% to 2% of the invoice value to accelerate payment by 30 to 60 days. The effective annual cost is lower than most third-party financing, but availability depends entirely on the retailer's program and your approved invoice volume.

Best for: Established suppliers already shipping to retailers that offer early payment. This is the cheapest option when available, but it only works after you've shipped and invoiced. It cannot fund production upfront and is limited to retailers with active programs.

6. Working capital loans: general-purpose cash for operations

Working capital loans provide a lump sum or line of credit you can use for any business purpose, including production, freight, marketing, or payroll. Unlike asset-specific financing (PO, factoring, inventory), working capital loans aren't tied to a particular order or receivable.

SBA 7(a) loans offer the most competitive rates, with NerdWallet reporting SBA loan rates from 9.75% to 14.75% APR as of 2026. Online term loans range more broadly, from 14% to 99% APR depending on lender and borrower profile.

Typical cost: Bank term loans start at 6.75% APR for the most qualified borrowers, according to Federal Reserve Bank of Kansas City data cited by the Wall Street Journal. Online lenders charge 14% to 35% APR for moderate-risk borrowers.

Best for: Brands that need flexible capital not tied to a single PO or invoice. Useful for covering the gap between what PO financing or factoring covers and what you actually need (marketing spend, slotting fees, freight). The application process takes longer than asset-based options, so plan ahead.

7. Bridge Marketplace: compare all options in one application

Each of the six methods above solves a different piece of the cash cycle. The challenge is knowing which combination fits your specific order, timeline, and margin. That's where Bridge comes in.

Bridge is a lending marketplace that connects CPG brands with 150+ lenders across PO financing, inventory financing, factoring, ABL, and working capital. You fill out one application in about 10 minutes. Bridge then matches you with lenders who compete for your deal, and you receive standardized term sheets, typically within 48 hours, that break down total cost, covenants, and prepayment terms.

For Walmart suppliers specifically, Bridge is a direct lender for purchase order financing, funding up to 100% of cost of goods on approved transactions.

The value is comparison. A single application can reveal that PO financing is cheaper than the term loan you assumed you needed, or that a hybrid of inventory financing and a small revolving line gives you more liquidity than any single product alone.

Side-by-side cost comparison

How to choose: a decision framework based on order size, margin, and timeline

Your best funding method depends on three factors:

Where are you in the order cycle? If you haven't started production, you need PO financing or a working capital loan. If goods have shipped, factoring or early payment programs free up cash faster. If you're carrying inventory between orders, inventory financing or ABL gives you a revolving source.

What are your gross margins? PO financing at 3% monthly costs roughly 9% over a 90-day cycle. If your gross margin on the order is 25%, that fee eats more than a third of your profit. If your margin is 50%, the math works comfortably. Run the numbers before committing. ABL and early payment programs are cheaper on an annualized basis, but come with eligibility thresholds.

How often do you need capital? Single large orders suit transaction-based financing (PO financing, factoring). Recurring retail programs with multiple SKUs and rolling orders justify the setup cost of an ABL facility or working capital line that you can draw from repeatedly.

A practical starting point: if this is your first or second major retail order, start with PO financing. As you build a track record with the retailer and accumulate receivables and inventory, layer in factoring and eventually graduate to ABL. At every stage, compare your options through Bridge to make sure you're not overpaying.

FAQs

What is the difference between PO financing and invoice factoring?

• PO financing pays your supplier before goods are produced, based on a confirmed purchase order. Invoice factoring converts your unpaid invoices into cash after goods have shipped. Many CPG brands use both: PO financing to fund production and factoring to accelerate cash once the retailer has been invoiced.

Can early-stage CPG brands qualify for purchase order financing?

• Yes. PO lenders underwrite the retailer's creditworthiness, not just yours. A confirmed purchase order from Walmart or Target carries significant weight. Brands with limited operating history but strong retail placement regularly qualify, though they may pay rates at the higher end of the 1.5% to 3% monthly range.

How fast can I get funded through Bridge Marketplace?

• Bridge aims to return multiple loan offers within 48 hours of a completed application. Actual funding timelines depend on the product: PO financing can close within 3 to 10 days, while ABL facilities take 30 to 60 days to set up. The application itself takes about 10 minutes.

Does comparing offers on Bridge cost anything?

• No. There are no upfront fees to apply and receive term sheets through Bridge. You only proceed with a deal that fits your margins and timeline.

Can I combine multiple funding methods for one order?

• Yes, and many growing CPG brands do exactly this. A common structure is PO financing to cover production costs, paired with factoring to accelerate cash after shipment. As volume grows, brands often consolidate into an ABL facility that wraps receivables and inventory into a single revolving line. Bridge can help you build this layered capital stack through one application process.

Your next step

If you have a confirmed retail purchase order (or expect one soon), the fastest way to find the right funding method is to compare options side by side. Start a 10-minute application on Bridge to see which lenders compete for your deal and what your all-in cost looks like across PO financing, factoring, ABL, and working capital.