Purchase order financing helps when you win an order larger than your cash. The financer pays your supplier directly, the goods ship to your customer, and your customer pays an invoice. The financer then takes back its money and fee, often by factoring that invoice, and you keep the rest.
It fits businesses that resell or distribute finished goods at solid margins. It is usually not available for services or for orders that need heavy in-house manufacturing, because the financer wants a clear chain from supplier to customer.
Example: You win a $100,000 order that costs $60,000 from your supplier. The financer pays the supplier and charges 3% per 30 days. The customer pays in 60 days, so the fee is $3,600, and you keep $36,400 before your other costs.
Approval rests on your supplier's reliability and your customer's credit as much as on your own.