If you're approved for Settle Working Capital, you can finance purchase order payments directly from an approved or open purchase order—even before receiving a vendor invoice. This is especially useful when vendors require deposits upfront or partial prepayments before production, fulfillment, or shipment begins.
With Purchase Order Financing, Settle pays your vendor on your behalf, and you repay Settle later using either Extended Payment Terms (BEPT) or Amortized Extended Payment Terms (AEPT).
What is Purchase Order Financing?
Purchase Order Financing allows you to finance a payment directly against a Purchase Order before a vendor invoice has been issued.
Common use cases include:
Vendor deposits
Production down payments
Prepayments required before goods are manufactured or shipped
Partial payments against large purchase orders
Unlike bill financing, which is tied to an invoice, PO financing uses the purchase order itself as the underlying business-purpose obligation.
Once funded:
Settle pays the vendor directly
The PO balance is updated
Your repayment schedule is created
You repay Settle according to your selected financing terms
What are my financing options?
Bullet Extended Payment Terms (BEPT)
Pay your vendor now and repay Settle in a single payment at the end of the selected term.
Best for short-term cash flow management when you expect funds to be available later.
Amortized Extended Payment Terms (AEPT)
Pay your vendor now and repay Settle through scheduled installment payments over the selected term.
Best for larger deposits that you want to spread across multiple repayments.
Both BEPT and AEPT:
Use your existing Settle Working Capital credit limit
Follow the same financing eligibility requirements as invoice financing
Use the same rates and financing terms available through your Working Capital account
How to finance a purchase order payment
Open an eligible Purchase Order
Purchase Order Financing is available on Purchase Orders that are:
In Open or Approved status
Eligible for payments
Associated with a vendor that matches the payment recipient
You can also access PO financing from:
The Finance POs button on your dashboard
The Working Capital utilization panel
The financing widget
Select Make Payment
Select Finance Payment instead of paying from your bank account.
Financing is only available when the payment vendor matches the Purchase Order vendor.
If the vendor does not match, the financing option will be unavailable.
Once a financed payment has been created against a Purchase Order, the vendor on that Purchase Order can no longer be changed.
Enter the financing amount. The financing amount automatically defaults to the Purchase Order's remaining balance.
You can:
Enter a custom amount
Use the % of PO field to quickly finance a percentage of the Purchase Order
The financed amount:
Cannot exceed the remaining Purchase Order balance
Cannot exceed your available Working Capital limit
If the amount exceeds your available limit, you won't be able to proceed until the amount is reduced.
Select repayment terms
Choose:
BEPT (Bullet Extended Payment Terms), or
AEPT (Amortized Extended Payment Terms)
Then select your desired repayment period using the Extend for field.
Review financing details
Before proceeding, you'll be able to review:
Financed amount
Interest rate
Estimated repayment schedule
Total repayment amount
You'll also see the following notice:
"Financed Payment: Settle pays the Vendor on your behalf, and you repay Settle later."
And:
"The interest rate displayed above is the period interest rate. Please see the Disclosure Table on your loan agreement for the annual percentage rate."
Before the payment can be submitted, you must:
Review the financing agreement
Review the disclosure table
Electronically sign the agreement
Once completed:
Settle pays the vendor directly
The Purchase Order balance updates automatically
Your repayment schedule is created
The financing agreement becomes available from the payment details page
Reviewing your repayment schedule
After the payment is created, you can open the Payment Details page to view:
Loan amount
APR
Repayment schedule
Interest and principal breakdowns
Repayment dates
You can also download the signed financing agreement directly from the payment.
Purchase Orders with financed payments will display financing information throughout Settle, including financing terms and repayment status.
Linking a financed PO payment to a bill
When the vendor invoice arrives later, a financed PO payment can be linked to a bill.
When this happens:
The payment becomes associated with the bill
The bill balance is updated
The financing agreement remains attached to the original PO payment
The repayment schedule does not change
The loan does not move to the bill
Financed PO payments cannot be unlinked from their Purchase Order after they are created. This preserves the financing audit trail and maintains the connection between the loan and the underlying business obligation.
How PO Financing Syncs to Your Accounting Software
If you're connected to QuickBooks Online or NetSuite, financed PO payments automatically sync to your accounting system.
Posting account selection
When creating a financed PO payment, Settle will automatically suggest your Prepaid Expenses / Deposits account if one exists.
This is recommended because Purchase Order deposits are typically treated as assets until the related bill is received.
You can still choose a different posting account if desired.
Using an expense account may result in expenses being recorded twice -- once when the deposit is paid and again when the vendor bill is created.
How syncing works
For financed PO payments, Settle automatically creates the appropriate accounting entries, including:
Initial payment entries when the financed payment is made
Reclassification entries when the payment is later allocated to a bill
Reversal entries if the payment is refunded or reversed
This ensures the deposit, bill, and repayment activity remain accurately reflected in your accounting system.
FAQs
Why can't I select the financing option?
Financing may not be available because:
Your business is not approved for Settle Working Capital
You don't have permission to create financed payments
The Purchase Order is not in an Open or Approved status
The payment vendor does not match the Purchase Order vendor
The financing amount exceeds your available credit limit
The financing amount exceeds the remaining Purchase Order balance
Can I finance only part of a Purchase Order?
Yes. Partial financing is supported and is commonly used for vendor deposits and down payments.
Can I change the vendor after creating a financed payment?
No. Once a financed payment exists on a Purchase Order, the vendor can no longer be changed.
Can I unlink a financed payment from a Purchase Order?
No. Financed payments cannot be unlinked from their Purchase Order because the financing agreement is tied to that Purchase Order.
Can I link a financed PO payment to a bill later?
Yes. When the vendor invoice arrives, the financed payment can be linked to a bill. The repayment schedule and financing agreement remain unchanged.
Will my vendor know I'm financing the payment?
Not necessarily. Vendors are paid by Settle and will not see your repayment terms. The payment appears as a standard payment from Settle.
Where can I view my financed PO repayments?
You can view repayment schedules and financing details from the payment details page, the Working Capital utilization panel, and related financing reporting throughout Settle.