Business Development Bank of Canada (BDC) – Purchase Order Financing (2022)

ByMaurice January 25, 2022September 7, 2022

Description:

The BDC Purchase Order financing to businesses that want to take on new business opportunities and are short of cash. Businesses can increase their cash flow to fulfill large orders without shortchanging their operations.

Financing can be used to:

complement a line of credit (accept larger contracts, purchase inventory to fulfill orders quickly),

launch growth projects (expand into new markets, domestic or international),

improve profitability (pay suppliers upfront to get special discounts, avoid currency exchange fluctuations).

Comments on Funding:

Funding is up to 90% to cover a significant portion of Purchase Order(PO) amount and starts at:

$10,000 for businesses that have been in operation between 12 and 24 months and
$100,000 for businesses that have been in operation for more than 24 months.

Loan terms:

up to 18 months repayment period;
interest-only payments and one balloon payment at the end of the term;
loan disbursement to the applicant so he can pay suppliers directly. No factoring on the loan.
money disbursed in Canadian or U.S. funds to avoid dealing with currency exchange fluctuations.

When It Ends:

Ongoing

Deadline:

Rolling deadline

Eligibility:

Applicant must:

be businesses of Canadian citizens or permanent residents;
have reached the age of majority in the province or territory in which they live;
have a business that has been in operations for at least 12 months.

Applications Steps:

complete an online business loan request providing a few details about the business, the project and contact information;

further discuss with a BDC representative when contacted.

Other Things to Note:

For domestic PO financing, BDC financing only. For international PO financing, partnership with EDC could apply. EDC (Export Development Canada) and BDC are collaborating to support business growth through the EDC-BDC International Purchase Order financing partnership, which provides applicants with vital capital to maximize opportunities in international markets.