Hupspot Guide to Purchase Order Financing
Hubspot users who sell physical products often struggle to accept large orders without enough cash on hand. Purchase order financing can bridge that gap so you can fulfill deals, keep customers happy, and grow faster without taking on traditional debt.
This guide explains how purchase order financing works, when it makes sense, and how sales teams can use it to close more deals based on the insights from the original HubSpot article on this topic.
What Is Purchase Order Financing in Hubspot Sales Workflows?
Purchase order financing is a short-term funding solution that helps you pay suppliers so you can fulfill confirmed customer orders. A financier advances funds to your supplier based on a valid purchase order, then is repaid once your customer pays their invoice.
Instead of turning away big deals because you lack inventory or cash, you use the purchase order as collateral to get financing for production and delivery.
Key Players in a Typical Hubspot-Driven Deal
When you manage deals in Hubspot and layer in purchase order financing, four main parties are involved:
- Your customer: Issues the purchase order for products.
- Your company: The seller fulfilling the order.
- Your supplier: Produces or delivers the goods.
- The finance company: Pays your supplier upfront based on the purchase order.
The customer’s purchase order is the foundation of the transaction. It confirms what they will buy, quantities, pricing, and delivery terms, which the finance company uses to underwrite the deal.
How Purchase Order Financing Works Step by Step
Whether or not you track every stage in Hubspot, the core process for purchase order financing is usually the same.
1. Receive and Verify the Purchase Order
You begin when a customer sends a signed purchase order. Make sure it clearly states:
- Product descriptions and quantities
- Unit prices and total order value
- Required delivery dates
- Payment terms (for example, net 30)
At this point, you can log the deal in Hubspot and attach the purchase order to the record so your sales, finance, and operations teams stay aligned.
2. Apply for Purchase Order Financing
Next, you submit the purchase order to a financing company. They will review:
- Your customer’s creditworthiness
- Your supplier’s credibility and pricing
- Your margin on the transaction
Approval depends more on the customer and the purchase order than on your company’s balance sheet, which helps younger or faster-growing companies that also use Hubspot for managing pipeline.
3. Finance Company Pays the Supplier
Once approved, the financier pays your supplier directly. Payment can be full or partial, depending on the agreement. Common structures include:
- 100% of supplier cost paid upfront
- A deposit with the remainder paid on shipment
This allows production or procurement to start immediately, even if you have limited working capital.
4. Supplier Ships Goods to the Customer
Your supplier produces and ships the goods to your customer. In some arrangements, the finance company may control shipping documents to ensure they are repaid once the customer pays.
You can track shipment status within your internal systems while keeping the deal and communication history up to date in Hubspot.
5. Invoice the Customer and Collect Payment
After shipment, you invoice the customer based on the purchase order terms. The customer pays either:
- Directly to the finance company
- To you, with an agreement to pass funds to the finance company
The financier deducts their fees and any advanced amounts. You keep the remaining profit from the sale.
Costs and Terms You Should Understand in Hubspot-Tracked Deals
Before promoting this option to customers inside a Hubspot-powered sales process, be clear about costs and conditions so deals remain profitable.
Typical Fees and Rates
Purchase order financing fees are often expressed as a percentage of the financed amount for a specific period. A few common structures include:
- Flat percentage fee per 30 days
- Tiered fees that increase over time
- Combined fees with related invoice factoring
Because funding is short-term and transaction-based, rates can be higher than traditional bank loans. However, you only pay fees on deals you actually win.
Qualification Criteria
Most purchase order financing companies look for:
- Business-to-business or government customers
- Non-cancellable, clearly written purchase orders
- Healthy gross margins (often 20% or more)
- Reliable, verifiable suppliers
The stronger your customers and suppliers, the easier it is to secure funding for the deals in your Hubspot pipeline.
Pros and Cons for Hubspot Sellers
Aligning your Hubspot sales strategy with purchase order financing can unlock growth, but it is not free money. Understanding both sides helps you choose the right deals to finance.
Advantages for Growth-Focused Teams
- Accept larger orders: Say yes to deals that would otherwise exceed your cash or inventory capacity.
- Protect working capital: Use financing for cost of goods while keeping your cash available for payroll, marketing, and operations.
- Leverage customer strength: Approval hinges on your customer’s credit, not only your company’s financials.
- Fast deal execution: Closing big opportunities in your Hubspot pipeline becomes more realistic.
Risks and Limitations
- Higher financing cost: Fees eat into margins, especially on lower-markup products.
- Limited to product-based sales: Works best for tangible goods, not pure services.
- Customer concentration risk: A default by a major customer can create serious cash flow issues.
- Operational pressure: Late shipments or quality issues can delay repayment and increase costs.
Track margin, risk, and timing in Hubspot notes and custom fields so your team evaluates each financed deal carefully.
When to Use Purchase Order Financing in Hubspot Pipelines
Purchase order financing should be used selectively. It is best suited for specific scenarios you can tag and monitor within Hubspot.
Ideal Use Cases
- Large, one-time orders from strong corporate or government buyers
- Seasonal spikes that strain inventory and cash flow
- Rapid growth where internal capital cannot keep pace
- New product lines with strong demand but limited history
By flagging these opportunities in Hubspot, sales leaders can prioritize which deals to send to financing partners.
Situations Where It May Not Fit
- Low-margin deals where fees erase profit
- High-risk customers with weak credit
- Custom or highly speculative projects with uncertain delivery
For those cases, consider alternatives like deposits, milestone billing, or reducing order size instead of pursuing purchase order financing.
Best Practices for Using Purchase Order Financing with Hubspot
To get the most value, integrate purchase order financing into your sales and operations process, not as a last-minute fix.
1. Standardize How You Capture Purchase Orders
Use consistent naming, attachments, and fields in Hubspot for deals that include purchase orders. This makes it easier to share complete documentation with financiers quickly.
2. Pre-Qualify Customers During Discovery
During early discovery calls, ask about your customer’s procurement process, payment history, and internal approval workflows. Notes captured in Hubspot help finance partners assess risk faster.
3. Coordinate with Suppliers Early
Confirm that your suppliers are willing to work with third-party financiers. Share expected timelines and documentation so they can respond promptly when payment comes from a financing company.
4. Monitor Cash Flow and Margin
Before accepting a financed deal, calculate:
- Total order value
- Cost of goods sold
- Expected financing fees
- Final net margin
You can store this analysis in Hubspot properties or notes to keep decision-making transparent across sales and finance teams.
Helpful Resources for Hubspot-Focused Teams
To deepen your understanding of purchase order financing mechanics beyond this guide, review the original HubSpot post on the topic here: HubSpot Purchase Order Financing Article.
If you are looking to optimize your sales processes, CRM setup, and revenue operations around these financing options, you can also explore expert consulting services at Consultevo.
By combining strong operational discipline with clear, accurate deal tracking in Hubspot, purchase order financing can become a powerful tool to unlock larger orders, support growth, and protect your company’s cash flow.
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