EPASS Capital - Frequently Asked Questions

Getting Started with EPASS Capital's Purchase Contract Funding Program

1. What is a Purchase Contract?

Purchase contracts are submitted by a customer to the supplier of a product. This is a promise to purchase goods rather than an invoice for goods already delivered. In some cases, funds are needed to allow a supplier to acquire raw materials needed to fill the order and to deliver the goods requested in the purchase order.

2. Who can benefit from the funding of purchase contracts?

Any business that has an agreement to deliver goods to a credit-worthy customer can benefit from purchase contract funding. The company can then use the proceeds from purchase order to finance the acquisition of raw materials, equipment and labour required to deliver the goods stipulated in the purchase order.

3. Why should my company use purchase contract funding?

If your company has a large purchase order but does not have enough money to manufacture and deliver the final product then you should consider purchase contract funding. Purchase contract funding is also ideal if your company needs funds in order to fulfill a number of small orders.

4. How can the cash flow of a business be improved using purchase contract funding?

A purchase contract not only implies future profits for your business, but it also generates a need for cash to buy the inventory with. A purchase contract from a creditworthy customer is a strong asset for your company. Funding the acquisition of inventory using a purchase contract as collateral enables a business to have sufficient cash flow to produce the inventory.

5. Who is eligible for purchase order financing?

EPASS Capital will consider funding companies with a good track record of producing goods. If your company is young or a start-up, company management must have a proven track record. Some of the variables we consider are your business history, the ability of your supplier(s) to provide the goods in question and the adequacy of the profit margin of the transaction to you, the supplier. Each purchase contract funding transaction stands on its own merit.

6. Can I obtain funding for a purchase contract issued by a government agency?

EPASS Capital does not fund contracts issued by government agencies. Government contracts are issued pursuant to the Public Procurement and Disposal Act No. 3 of 2005. Various provisions of the Act limit EPASS Capital’s ability to purchase contracts issued by government agencies. For more on the Public Procurement and Disposal Act of 2005 and factoring government claims, click here [PDF]

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Frequently Asked Questions

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