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Landing a Costco purchase order is a milestone for any CPG brand. It also creates an immediate challenge: you need the capital to produce, package, and deliver large volumes before you ever get paid. That is where Costco PO financing becomes essential.
This 2025 guide explains how Costco PO financing works, what it costs, how to qualify, and how brands use it to scale.
What Is Costco PO Financing?
Costco PO financing is short-term growth capital that allows brands to fund production and fulfillment of a Costco purchase order before receiving payment from Costco.
This funding helps you cover:
- Manufacturing
- Packaging and logistics
- Inventory buildup
- Delivery requirements and compliance
Once Costco pays the invoice (typically Net 30–60), the lender is repaid.
Why Brands Need PO Financing for Costco
Costco orders are significantly larger than standard retail orders. They often require:
- High upfront production costs
- Large minimum order quantities
- Strict supply chain and routing rules
- Cash tied up while waiting for payment
PO financing eliminates these cash-flow barriers so brands can accept and fulfill big-box orders confidently.
How Costco PO Financing Works
1. You Receive a Costco Purchase Order
The PO is the core asset that lenders underwrite.
2. You Apply With a PO Financing Provider
Most lenders only need the Costco PO, your production quote, and basic financials. Approval can take 24–72 hours.
3. Funds Are Sent to Your Manufacturer
Lenders typically pay factories, co-packers, and logistics partners directly.
4. You Produce and Ship to Costco
Brands must follow Costco’s routing, packaging, labeling, and timing requirements.
5. Costco Pays the Invoice
When Costco pays, the lender collects repayment and sends you the remaining balance.
Benefits for CPG Founders
- No equity dilution
- Faster than traditional bank financing
- Underwritten on Costco’s credit strength
- Supports large or multiple POs
- Maintains healthy cash flow during rapid growth
Costs in 2025
Typical pricing ranges:
Financing Type
Typical Cost
PO Financing: 1.5%–3% per 30 days
Factoring: 1%–2% per 30 days
Combined PO + AR financing: 2%–4% per 30 days
Requirements to Qualify
Most lenders look for:
- A valid Costco purchase order
- A confirmed production plan
- A commercially validated product
Helpful but not required:
- Previous Costco history
- Strong supply chain reliability
How Much Can Be Financed?
Lenders typically finance 70 to 100 percent of the PO depending on margins, cost structure, and manufacturing reliability. Costco’s strong credit profile usually allows for higher advance rates.
Common Use Cases
Brands use Costco PO financing to:
- Fund first-time Costco launches
- Cover seasonal spikes
- Expand from local to national Costco regions
- Bridge cash-flow gaps
- Accept larger POs than usual
2025 Trends in Costco PO Financing
- Faster approvals through AI-driven underwriting
- More flexible financing structures such as hybrid PO-and-AR lines
- Increased support for emerging and early-stage brands
Mistakes to Avoid
- Accepting a PO without confirming production capacity
- Underestimating freight, packaging, or logistics costs
- Missing Costco delivery windows
- Applying for financing too late
- Attempting to self-finance a large PO
Initiate the financing process as soon as the PO arrives.
Is Costco PO Financing Right for You?
You should consider PO financing if:
- You need upfront capital to fulfill a large PO
- Costco’s payment terms strain cash flow
- Your manufacturer requires deposits
- You are scaling faster than your available capital
- You want to avoid raising equity
Final Takeaway
A Costco PO can rapidly scale a brand, but only if you can fund production and fulfillment. Costco PO financing ensures you can produce at volume, deliver on time, and accept larger opportunities without sacrificing equity or straining cash flow. With the right financing partner, a single Costco PO can become a long-term growth engine in 2025.
