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

A $200,000 purchase order from Walmart or Target sounds like a milestone. Then the math hits: your co-packer needs 40% upfront to start production, freight costs are due at shipment, and the retailer won't pay for 60 to 90 days. That gap between "we got the PO" and "we got paid" has killed more CPG brands than bad products ever did.

The good news is that there are at least seven distinct ways to fund that order, each suited to different stages, margins, and timelines. Picking the wrong one costs you more than the financing itself. This guide breaks down the real costs, best use cases, and trade-offs for each method so you can match your funding to your specific situation.

1. Purchase order financing: pay your supplier directly

PO financing is the most common first move for CPG brands landing their initial big-box orders. A lender pays your co-packer or supplier directly based on a confirmed purchase order from a creditworthy retailer. You never touch the funds.

This works best when you lack finished inventory to pledge as collateral and need production funded before goods exist. It is transaction-based: you repay when goods ship and invoices get funded.

Typical cost: 1.5% to 3% of the order value per 30-day period, according to Bridge Marketplace's CPG financing guide. On a $200,000 order with a 90-day cycle, that translates to roughly $9,000 to $18,000 in total fees.

Best for: First-time retail orders, new SKU launches, and brands without existing inventory or receivables to borrow against.

Watch out for: PO financing is the highest-cost option among the seven listed here. If your gross margins are below 30%, the fees can eat most of your profit. Run the numbers before committing. For a deeper comparison of PO financing versus other options, see how PO financing compares to factoring.

2. Invoice factoring: turn shipped invoices into immediate cash

Invoice factoring converts your outstanding invoices into cash after you ship goods. A factoring company purchases your invoice at a discount, advances you 80% to 90% of the face value within 24 to 48 hours, then collects payment from your retailer. Once the retailer pays, you receive the remaining balance minus the factoring fee.

Typical cost: 1% to 5% of the invoice value per 30-day period, according to Bridge's accounts receivable factoring guide. Large, creditworthy retailers like Walmart and Target tend to attract rates at the lower end of that range (1% to 2%) because the factoring company's risk is tied to the buyer's creditworthiness, not yours.

Best for: Brands that have already shipped product and need cash before the retailer's Net 60 or Net 90 payment terms expire. Factoring works well for repeat orders with established retail relationships.

Watch out for: Some factoring agreements include notification clauses, meaning your retailer knows you're factoring invoices. This matters more for newer supplier relationships. Also check whether the agreement is recourse (you repay if the retailer doesn't) or non-recourse (the factor absorbs the loss). For more on how factoring fits the retail payment cycle, read how invoice factoring helps with retail payment delays.

3. Inventory financing: borrow against what's on your shelves

Inventory financing uses your finished goods as collateral to secure a loan or credit line. If you have $500,000 worth of product sitting in a warehouse waiting for retailer purchase orders or seasonal sell-through, a lender will typically advance 50% to 70% of that inventory's appraised value.

This method sits between PO financing and asset-based lending in both cost and complexity. It works when you have product but need cash to fund the next production run, cover operating expenses, or build safety stock.

Typical cost: Lower than PO financing, typically 8% to 15% APR depending on the type of inventory and how quickly it turns. Perishable or seasonal goods cost more to finance because they carry higher lender risk.

Best for: Brands with warehouse stock that need working capital without selling equity. Especially useful for funding inventory builds ahead of retail orders.

Watch out for: Lenders will audit your inventory regularly, and the advance rate depends on product type. Finished goods get better rates than raw materials. Slow-moving inventory may not qualify at all.

4. Asset-based lending (ABL) revolving lines: the growth-stage workhorse

Asset-based lending provides a revolving credit line secured by your combined assets: inventory, accounts receivable, and sometimes equipment. Unlike transaction-specific options like PO financing, an ABL line gives you ongoing access to capital that scales with your business.

According to Yahoo Finance's 2025 market report, the global ABL market grew from $785.6 billion in 2024 to $896.12 billion in 2025, reflecting how widely businesses rely on this structure. CPG brands with diversified retail accounts, consistent sales history, and a mix of inventory and receivables are strong ABL candidates.

Typical cost: ABL is the lowest-cost option for established brands. Rates often fall between prime plus 1% to 3%, translating to roughly 8% to 11% APR in the current rate environment. According to Federal Reserve data cited by Nav, median bank term loan rates sat at 7.22% as of Q3 2025, and ABL lines for qualified borrowers land in a similar range.

Best for: Brands doing $3M or more in annual revenue with at least 12 months of retailer payment history. ABL is the tool you graduate to once you have enough assets to make it worthwhile.

Watch out for: ABL requires more documentation, regular reporting (borrowing base certificates), and often comes with financial covenants. Setup takes longer than transaction-based financing: plan 30 to 60 days from application to first draw. Learn more about how ABL compares to factoring and other structures.

5. Retailer early payment programs (like C2FO)

Some major retailers, including Walmart, offer early payment programs that let suppliers get paid before the standard Net 60 or Net 90 terms. Walmart's early payment program, powered by C2FO, works as a reverse auction: you select which invoices to accelerate and set the discount you're willing to offer. If Walmart accepts, you get paid in as little as 24 hours, according to Walmart's C2FO program page.

The cost structure is different from traditional financing. Instead of paying interest to a lender, you offer Walmart a discount on your invoice. A typical structure is "2/10 Net 60," meaning Walmart takes a 2% discount if they pay within 10 days instead of 60.

Typical cost: 1% to 3% of the invoice value, depending on how much acceleration you need and what discount rate you offer. This annualizes to roughly 12% to 36% APR, but many suppliers find it competitive because there's no application process, no credit check, and no separate lender relationship.

Best for: Existing Walmart (or other participating retailer) suppliers who already have approved invoices and need faster cash conversion. It is post-shipment financing only: you must have already delivered goods and received invoice approval.

Watch out for: This program is only available from retailers that participate, and you give up margin on every invoice you accelerate. If you're using it on every invoice, the annual cost adds up fast. It also doesn't help with pre-production funding, since the invoice must already exist.

6. Working capital loans: general-purpose flexibility

Working capital loans are term loans or lines of credit used for any short-term business need, including funding production runs, covering payroll during long payment cycles, or bridging seasonal gaps. Unlike the options above, they aren't tied to a specific asset or transaction.

According to Bankrate's 2026 lending survey, average working capital loan rates range from 7.3% to 7.6% APR for standard term loans and 6.5% to 8% APR for lines of credit, as of mid-2025. Rates vary widely based on your credit profile, revenue, and time in business.

Typical cost: 7% to 25% APR for bank and online lender products. SBA-backed options can run lower (around 6% to 8%), but the application timeline stretches to weeks or months. Merchant cash advances (MCAs) marketed as "working capital" can exceed 40% effective APR, so read the terms carefully.

Best for: Brands with strong credit and revenue history that need flexible capital not tied to a single order. Also useful as a bridge while waiting for an ABL facility to close. For a full breakdown of how working capital loans work, see Bridge's working capital loan guide.

Watch out for: Because these loans aren't secured by a specific receivable or PO, lenders rely more heavily on your credit score, revenue, and personal guarantee. First-time founders with thin financials may not qualify for the best rates.

7. Bridge Marketplace: compare all six options in one application

Each of the six options above has a different application process, different documentation requirements, and different lender networks. Researching them individually takes weeks. Bridge Marketplace lets you submit a single application and receive multiple competing term sheets, typically within 48 hours.

Bridge's lender network includes banks, direct lenders, and specialized CPG financing partners who understand retailer payment terms, co-packer deposits, and seasonal cycles. Instead of approaching each lender one by one, you upload your financials to a centralized deal room and receive comparable offers side by side.

This matters because the cost difference between lenders for the same financing type can be significant. Two PO financing providers might quote 1.5% versus 2.8% per 30-day period on the same order. On a $200,000 PO with a 90-day cycle, that's the difference between $9,000 and $16,800 in fees.

Best for: Any CPG brand weighing multiple financing options or wanting competitive quotes without filling out six separate applications. Especially valuable when you're unsure which structure (PO financing, factoring, ABL, etc.) best fits your situation.

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

The right funding method depends on three factors:

Here's a quick decision path:

• You have a confirmed PO but no inventory or cash: Start with PO financing.

• You've shipped product but the retailer won't pay for 60+ days: Use invoice factoring or a retailer early payment program.

• You have inventory in a warehouse and need cash for the next run: Inventory financing.

• You have $3M+ in revenue and need ongoing access to capital: ABL revolving line.

• You need flexible cash and have strong credit: Working capital loan.

• You're not sure which option fits or want to compare rates:Start a 10-minute application on Bridge Marketplace to see competing offers across multiple financing types.

Most CPG brands don't stick with one method forever. Early orders require PO financing because no collateral exists yet. As you build inventory and establish retailer payment history, you can layer in factoring, then graduate to ABL. The financing stack evolves with the business.

FAQs

Can I use more than one financing method at the same time?

Yes, and most growing CPG brands do. A common stack is PO financing for new orders, factoring for shipped invoices, and an ABL line for ongoing working capital. The key is making sure your lenders are aware of each other, since multiple liens on the same assets can complicate things.

How do I know if my margins are high enough for PO financing?

Calculate the total financing cost as a percentage of the order's gross profit, not the revenue. If a $200,000 order has a 35% gross margin ($70,000 profit) and PO financing costs $15,000, you're spending about 21% of your gross profit on financing. Most brands aim to keep financing costs below 25% of gross profit on a given order.

What documents do lenders typically need for CPG financing?

Most lenders want to see the confirmed purchase order, 12 months of bank statements, a current profit and loss statement, an accounts receivable aging report, and details about your co-packer or supplier arrangement. ABL facilities also require inventory reports and may need audited financials.

How fast can I actually get funded?

PO financing and factoring can fund in 3 to 7 business days for first-time applicants. Repeat borrowers often see funds in 24 to 48 hours. ABL lines take 30 to 60 days to establish but provide same-day draws once set up. Bridge Marketplace aims to deliver multiple term sheets within 48 hours of a completed application.

Does using PO financing or factoring affect my relationship with the retailer?

PO financing is invisible to the retailer since the lender pays your supplier directly. Factoring can be visible if the factor sends a notice of assignment to the retailer, though many factoring companies offer non-notification arrangements. Retailer early payment programs like C2FO are retailer-initiated, so there's no stigma attached.