LPO Financing and How to Start it.

A Local purchase Order LPO is a document sent by the supplier to a vendor authorizing the shipment of a particular product to the customer at a specific price and terms. This document once given out cannot be changed as is a legally binding contract that unless the two involved parties agree to do so.

LPO financing is designed for businesses that do not have enough working capital or cash. The best advantage of LPO financing is that you do not need to have any form of security in form of Physical assets that other loans may require.

LPO Financing allows businesses that have obtained purchase orders/letter of Award to deliver goods and services or carry out contractual works.

It is designed for contractors and vendors of reputable organizations to obtain the capital required to execute work orders and local purchase orders from these respective companies. This product offering ensures continuity of operation as immediate working capital needs are met.

How to Start LPO Financing.

In order to qualify for LPO Financing, you need to meet a certain threshold of requirements. We have highlighted below some of the MUST meet requirements before you think of starting LPO Financing. Take a look.

  • Valid LPO from the government ministry or Parastatal, a reputable (blue chip) company, listed NGOs or KCB List of Corporate companies.
  • Pro-forma invoice or quotation of items of purchase from the supplier
  • Bank statements for the last 6 months (for non-customers)
  • Copy of proposed collateral for borrowings above Kshs. 1,000,000
  • Valid business registration and permit documents
  • Valuation report where applicable
  • Audited accounts for amounts above 5.0 M
  • List of past contracts completed – dates, amounts, etc
  • Debtor/creditor duly aged analysis
  • Rates and Fees
  • 3% negotiation fees on the financed amount

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