A/R Factoring and PO Funding for Walmart Suppliers
Financing Options for Walmart Suppliers
Walmart generates over 570 million in annual revenue by providing consumers with groceries, clothes, electronics, household goods, and sporting goods, to name just a few of their product offerings. Small businesses and entrepreneurs frequently have the opportunity to fulfill large Walmart purchase orders (PO), but they lack the working capital to deliver the merchandise within Walmart’s terms.
Bankers Factoring, however, works with startups, entrepreneurs, and Walmart vendors with non-recourse invoice factoring and PO financing solutions that remove the stress of funding your Walmart business. Business owners supplying Walmart have spent countless days and nights trying to solve their cash flow problems caused by Walmart’s extended payment terms.
Has your business received a once-in-a-lifetime PO from Walmart but turned it down? By fulfilling Walmart POs, your business has the opportunity to go from a startup distributor to a supplier with purchasing bargaining power.
Walmart Vendor Financing: Invoice Factoring
Walmart vendors can finance their business through invoice factoring, also called accounts receivable (A/R) Factoring. Invoice factoring provides business owners payroll funding, working capital, and cash flow solutions to take on Walmart POs. A/R Factoring also enables startup business owners to avoid waiting 90 to 120 days for payment from Walmart.
How does Walmart Invoice Factoring Work?
Invoice factoring is, in fact, a relatively simple and easy process, especially compared to traditional bank lending or financing. First, our client (the Walmart vendor) sells their open Walmart invoices or receivables to Bankers Factoring to conduct an invoice factoring transaction. When Bankers Factoring buys your A/R, we provide an initial cash advance up 92%.
You no longer have to wait 120 days for Walmart payment by selling your open invoices or receivables to Bankers Factoring. Walmart Invoice Factoring works in five simple steps:
- The client first generates an invoice for goods or services delivered to Walmart
- The client sells open Walmart invoices to Bankers Factoring
- Bankers Factoring then cash advances up to 92% of the receivable value on the same day of approval
- Walmart pays Bankers Factoring directly per the PO agreement
- Bankers Factoring finally pays our client the remaining invoice value less our factoring fee
Visit our Frequently Asked Questions to learn more.
A/R Factoring Solves Walmart Vendor Cash Flow Challenges
Most Walmart vendors or suppliers have anywhere from 30 to 90-day payment terms. These credit or payment terms are the standard operating procedure for Walmart vendors. As a corporation, Walmart has some of the most potent bargaining power globally, which limits the level of negotiating leverage vendors have.
As a Walmart Vendor, your business sells its product to Walmart, but your company must first procure the inventory. This constraint is common for Walmart suppliers, as they frequently need to pre-pay for inventory purchases. Business owners are stuck managing their cash flow for months while waiting for their Walmart checks.
Bankers Factoring non-recourse invoice factoring solves the typical cash flow constraints from Walmart Vendors in the following ways:
- Eliminating the cash gap in receivables to payables
- No longer wait 90 to 120 days to cover operating expenses
- Invoice factoring provides payroll funding
- Total A/R Management
- We take on the credit risk and provide bad debt protection
- Invoice factoring cash flow can be used to purchase more inventory and take on new POs
- Increased purchasing power and leverage
PO Financing and Import Trading for Walmart Vendors
Walmart vendors earn business on the quality and price of their products. Vendors with the ability to drive their costs lower than competitors have a great chance of obtaining Walmart POs. Walmart vendors generally import products produced offshore to lower their costs of goods sold (COGS).
PO Financing or Trade Financing is a creditor advance used to pay suppliers for items your business sells, resells, or distributes to Walmart. PO Financing works hand in hand with A/R Factoring. If your company has open invoices and needs to purchase more products for a new order, we can help you!
PO Financing requires your business to have at least 20-30% gross margins. As an alternative source of financing, PO Funding allows startups to have access to working capital. We never want our clients to resort to an expensive Merchant Cash Advance (MCA) or hefty credit card interest rates.
Finance payments to your overseas suppliers with purchase order funding before your customers pay you. To learn more, visit Bankers Trade Financing.
How To Become a Walmart Vendor
To become a Walmart Vendor, you can apply online today. There are specific requirements for vendors, such as sourcing methods, business practices and ethics, and insurance requirements. Visit the Walmart Vendor Requirements page to learn more.
- Standards of business operations and general requirements: Federal Taxpayer Identification Number (TIN), Dun and Bradstreet (D&B) Registration, and GTIN/UPC membership
- Audits, Certifications, and Testing: product safety, food safety, responsible sourcing, and supply chain security
- Insurance Requirements
Common Issues for Walmart Vendors
Walmart vendors fight the challenges of Guaranteed Sales Purchase Orders where all goods can be returned. We can help clients understand how to set limits on the number of returns Walmart can send back.
- Chargebacks: defective product, quantity discrepancy, markdown, returns, and allowances
- EDI communication: startups unfamiliar with EDI and the order fulfillment process will incur penalties and fines for not adhering to process requirements for shipping and invoicing
- Seasonal demands and the lack of cash flow to purchase inventory
- 98% on-time shipping requirements
The Bankers Factoring Advantage
Bankers Factoring non-recourse factoring program helps Walmart Vendors overcome the constraints of strict guaranteed sales policy and chargebacks. We take on the credit risk for slow or short-paid invoices from Walmart. Our clients benefit from the unique features of our factoring solutions:
- Same-day funding after approval
- We take the credit risk
- We provide 24/7 online A/R reporting
- We remove the burden on your receivables department
- Tiered factoring rates for startups
- PO Financing is available with Invoice Factoring