Local Purchase Order (Lpo) Finance
Short-term credit facility offered to the supplier for the purpose of mobilizing resources and subsequent serving of the LPO
Product Features
Denominated in local or foreign currency
Attracts interest payable either monthly or together with the principal upon settlement of respective contract proceeds
Maximum amount financed is 80% of the cost of executing the LPO
Maximum tenor of 180 days
The facility is self-liquidating
Flexible security requirement depending on integrity of the drawee and tenor.
Benefits
Opportunity to cushion a short-term liquidity crisis
Immediate access to proceeds of sales
Fast and easy processing
Opportunity to expedite a supply contract
Requirements
Completed Loan application form
Financial card
Collateral in the form of fixed assets, stocks under collateral management of combination of both
An approved LPO from reputable company
Letter of undertaking to pay bank directly from drawee/off taker
Letter of assignment of account receivables with recourse.