Asset Based Loans For Companies, Nationwide!

Asset Based Loans For Companies, Nationwide!

As a Placement Agent, Huntington Coast Capital has placed over $12,000,000 in new asset based loans through August of 2023! We have seen increased interest in debt consolidation, business acquisition, supply chain/purchase order financing, and contract financing loan requests.

If your business is burdened by high interest rate debt, or if you have a growth opportunity that requires additional financing, we can help! 

High interest rate debt can kill the financial strength of a company. The ease of access and quick loan approvals can lure business owners in to taking the quick cash without considering the ramifications down the road. A common scenario we see is a company that has taken on 3, 4, 5 (and in some cases more) of the Merchant Cash Advance (“MCA”) loans available in the market, and are now having a hard time getting out from underneath them. Lenders look poorly at business owners who pile on this type of debt. The lender’s concern is that the business owner is not exercising business prudence and are financing themselves out of business. Some advice – if a lender refers to your business as a “merchant”, run the other direction!

A more positive scenario we advise on are companies that need to finance growth opportunities. Whether it’s to finance the cost of additional space (real estate acquisition or tenant improvements), cover the cost of goods to suppliers, or finance the cost of a particular contract, Huntington Coast Capital has you covered!

About Huntington Coast Capital. 

Huntington Coast Capital secures funding for companies in a broad base of industries. Our clients come to us to find a more flexible lending partner to meet their growth needs. Many are declined by the bank and are in need of a more creative and entrepreneurial funding solution.

We consult on a wide range of funding options for business owners throughout the United States in the following areas:

  • Supply chain financing 
  • Contract Financing (covers the upfront cost of mobilization and ongoing working capital needs)
  • Equipment loans and lease programs (learn more about our equipment loan platform offered through our subsidiary)
  • Lines of credit for working capital needs
  • Specialty Property Financing (gas stations, car wash properties, skilled nursing facilities, hotel properties)
  • Term loans for marketing, hiring staff and general expansion needs
  • Factoring services for accounts receivable financing that also provides for back office credit and collection functions
  • Purchase order financing
  • Asset based loans
  • Business acquisition financing
  • Inventory financing
  • Private commercial real estate bridge loans
  • SBA loans for business and real estate needs

Whether you are a startup or established, in need of $100,000 or $10,000,000 we have the capital partners to meet your needs. Contact us to see how we can assist in taking your business to the next level. To your success!

Purchase Order Financing Versus Letters Of Credit

Purchase Order Financing Versus Letters Of Credit

Paying suppliers is a required and continuous expense for business owners whether you’re in retail, own a restaurant or are a manufacturer or distributor. Cost of goods sold is the first deduction against gross revenue on any companies income statement. The lack of ability to pay for the cost of goods expense severely impacts the growth potential of the business. In this article, we are going to look at the difference between purchase order financing and letters of credit and how they are used in business.

Letters of Credit

Letters of Credit (abbreviated “LC’s”) are bank instruments drafted to secure international and domestic purchases. They provide assurances for both the buyer and the seller of the goods. The seller is assured payment as long as the terms within the LC are met. These can include satisfactory inspection and acceptance of the goods at the port, factory or upon arrival to their destination. When the goods are paid for under the LC is negotiated between the parties.

Letters of Credit essentially assure two things: 1) the buyer has the financial wherewithal to make the payment for the goods, and 2) the supplier will deliver the goods as ordered on time. LC’s are opened with both the buyer’s bank and the seller’s bank and work together to assure the performance of each.

Requirements are a bit more strict with Letters of Credit than they are with purchase order financing. The LC has to have underlying collateral that is typically in the form of cash or accounts receivable.

When a company applies for a Letter of Credit from a bank the company must have an equal or greater amount of cash or accounts receivable available once the LC is drawn on. The buying entity needs to demonstrate that they have the financial wherewithal to cover the cost of goods once conditions have been met. The buying entities funds are typically held in a control account (similar to an escrow account) until needed. This control of the funds is necessary to assure the supplier that funds will remain available for payment from the time ordered to delivery and payment.

In this respect, LC’s really are not a financing tool as no monies are actually borrowed but rather set aside for a particular transaction. This form of international trade “finance” is a protection against financial loss on available capital versus new money used to cover the cost of goods.

This form of financing is set aside for more established companies with enough liquid collateral available to cover the expense. Consider LC’s as an insurance against loss of principle versus true outside financing. For more granular details on Letters of Credit click here.

Purchase Order Financing

Conversely, purchase order programs offer financing to cover the cost of goods to suppliers beyond cash and accounts receivable collateral. Startups, companies experiencing high growth and even the majority of established companies often need additional capital. In the majority of cases, the capital needs are larger than the accounts receivable balance or internal cash reserves.

In these scenarios, Letters of Credit would fall short of the financing needs required to cover the cost of goods.

Purchase order financing pays suppliers for materials required for the buying entity’s growth. Clients utilizing purchase order financing sign contracts with the finance partner. There is typically a personal guaranty for the facility that acts as a backstop should the transaction not offer enough support to pay back the line in a downside scenario.

Purchase order finance underwriters focus on three main areas when assessing new funding requests:

  • Financial strength of the customer(s) for which the PO’s are being generated: when purchase order financing is being requested the fund will want to thoroughly understand the credit strength of the underlying customer. For example, if the underlying customer is a nationally known retailer odds of approval are greater. Conversely, if the PO’s are being generated for a “mom and pop shop” with limited to no financial information available, approval is much more difficult.


  • Financing strength of the supplier: the source of where the goods are coming from whether international or domestic must also be fully understood. Suppliers are typically larger and more established. Usually, but not always, financial information is available on these companies and information can be verified to give the purchase order finance company comfort in wiring them money for the transaction.


  • Transaction history between the parties: It is important to know how long the client has been dealing with a particular supplier. Approval is much easier if there is a long history that can be documented through shipping documents, invoices and bank transactions supporting successful delivery of past orders. Purchase order financing works best when taking a company’s current business cycle from Point A to Point B versus financing orders for an entirely new supplier relationship that has zero past transaction history. This is because there are a number of inherent risks that go with financing first time orders; lack of past, successful delivery of orders, fraudulent supplier claims, capital at risk before performance, to name a few.

Purchase order financing is a line of credit used specifically to cover the cost of goods when capital needs are larger than available internal cash or accounts receivable.

In Summary

If you are an established company with no need to borrow outside capital, a Letter of Credit would be adequate for your needs. LC’s provide assurance against loss of principle by providing a check and balance prior to releasing funds.

Purchase order financing comes in to play when cash needs are higher than internal capabilities.

Both mechanisms facilitate trade financing and move business forward. Which program is best for your company depends on where you fall on the spectrum. To learn more about how Huntington Coast Capital’s purchase order financing solutions can work for you, watch this short video that explains the process.

We provide consultation and secure funds for a broad base of business financing needs. Call 714-719-8966 to learn how these programs can work with you to grow your business!

5 Things You Should Know About Purchase Order Financing

5 Things You Should Know About Purchase Order Financing

Purchase order financing is widely used to cover the costs of materials, supplies and delivery expenses associated with various products and services. Huntington Coast Capital has been securing purchase order financing for clients since 2009.

Here are 5 things you should know about purchase order financing:

This financing is offered to cover the cost of goods associated with your sales. 

Companies in most all industries have a cost of goods. There are raw materials needed for manufacturing operations, supplier payments required for wholesalers and inventory purchase needs for eCommerce and retail organizations to name a few. In the beginning, most companies finance their cost of goods internally with their startup capital which usually means their personal savings. If you are successful in your business, you will quickly outgrow your internal capital capacity and need to finance the increased cost associated with your sales. This is where purchase order financing plays a critical role in the growth of your business. Without purchase order financing, companies would be limited in how far they could take their business.

Banks do not offer this form of financing (unless you’re a large corporation and qualify to operate through a Letter of Credit).

For most business owners the first option is to speak with their bank when needing a “line of credit” for their business. The problem is that banks do not offer this form of financing for a number of reasons with the inherent risk in the financing being number one. The bank will offer a nominal line of credit, if at all, based on the financial strength of the business. Unless you’re a blue chip company that is well established, profitable and have a long history with your suppliers, you will not be getting any line of credit worth the time and effort.

Larger companies that meet the criteria can operate under a Letter of Credit which serves a similar purpose as purchase order financing, but is reserved for the top tier companies seeking credit.

Here Is A 30-Second Video Explaining How It Benefits Your Business

The cost is between 2.5% and 4% every 30 days on the money borrowed.

The cost you can expect when exploring your purchase order funding options is a monthly cost between 2.5% and 4% charged against the money borrowed every 30 days. For example, if you needed to borrow $100,000 to cover your supplier costs the finance expense would be between $2,500 and $4,000 for every 30-day period the line remains outstanding. If your margins are the typical 30% the sales price would be $130,000 to the customer and you would pay between $2,500 and $4,000 for the purchase order financing line. Your resulting gross profit would be $26,000 to $27,500 depending on the rates charged.

Keep in mind that while this may seem expensive, this represents a profit you would not normally realize without the financing in place. As a matter of fact, purchase order financing doesn’t cost you anything. You actually lose money by not using using it. This is especially true when the purchase order finance company is covering the entire cost of goods including any supplier deposits and shipping and logistics costs. In short, you’re playing with the house’s money as they say. Your margins and profit realized will be reduced, but still substantially better than the zero profit you would realize by not being able to deliver on the order.

Can work in conjunction with other forms of financing

Purchase order finance companies work nicely in conjunction with other forms of financing. In the majority of cases the business owners already have an existing line of credit. The line limit is not adequate to meet their growth needs and the bank has declined offering them further credit. Purchase order finance companies prefer that the company have access to additional credit as this provides further assurance that their line will be paid off.

Allows for unlimited growth of your business as long as the sales are supported by purchase orders from your customers. 

As alluded to above, purchase order financing provides your company with the access to capital necessary for growth. Companies in all industries utilize purchase order financing in some shape or form. Firstly, there is the direct borrowing of capital as described in this article and then there is credit offered by suppliers (i.e. n30 terms with discounts for early payment) to support growth. However, the later example is becoming more rare as suppliers are in need of cash flow themselves and are requiring payment at the time of purchase.

Our clients experience the benefits of not having to worry about fulfilling orders. There is nothing worse for a company’s reputation than to promise delivery of a product and then not being able to deliver. When this happens the customer loses confidence and seldom return and offer a second chance. You have one chance to prove yourself. Don’t let lack of capital hold your business back!


If your business could benefit from additional capital, explore the purchase order funding options available to you by contacting us at 844-239-2632 or online here. We look forward to providing your business with solutions and playing a part in the growth of your business!

If you would like to research further, here are some further resources regarding purchase order financing.