Getting a large customer order is exciting, but it can create cash flow challenges if you need to pay suppliers before your customer pays you. The BDC Purchase Order Loan is made for this situation. It helps Canadian businesses finance confirmed orders, so you can deliver on time without draining your cash flow.
This guide explains how to apply for a BDC Purchase Order Loan, what BDC looks for, and how to prepare so your request moves faster.
The BDC Purchase Order Loan is a repayable financing product, not a grant. BDC advances funds so you can pay suppliers and fulfil a confirmed customer order. You repay BDC once you collect payment from your customer.
Key terms you should know:
This financing is commonly used by manufacturers, wholesalers, distributors, and import/export businesses with long production or shipping timelines.
Before applying, check that your business meets BDC’s baseline criteria:
BDC will also assess whether your gross margins are strong enough to repay the loan after fulfilling the order.
Having documents ready can reduce back-and-forth after you apply. BDC commonly asks for:
Tip: GrantHub’s eligibility matcher can help you find other working capital programs that may fit your business profile while you prepare your BDC application.
Applications are submitted directly through BDC’s Purchase Order Financing form. You’ll provide:
Once submitted, your request is assigned to a BDC representative.
After your application:
Be ready to provide clear numbers and realistic timelines to improve your approval chances.
If approved, BDC will issue a loan offer outlining:
Funds are typically released to support supplier payments as agreed.
Applying without a confirmed purchase order
Quotes or verbal commitments are usually not enough. BDC expects a firm order.
Underestimating supplier and logistics costs
If your actual costs are higher than you planned, it may be hard to repay the loan.
Weak gross margins
Even with a large order, thin margins may lead to rejection.
Poor credit disclosure
BDC checks credit history. Surprises late in the process slow approvals.
Q: Is the BDC Purchase Order Loan a grant?
No. It is a repayable loan, not a non-repayable grant.
Q: How much can BDC finance under this program?
BDC can finance up to 90% of eligible order costs, with total funding between $100,000 and $750,000.
Q: How long do I have to repay the loan?
Repayment terms can be up to 18 months, depending on your order cycle.
Q: Can startups apply for purchase order financing?
Most applicants need at least 12 months of revenue and a solid credit track record.
Q: Are loan proceeds taxable income?
No. Loan funds are not taxable income, but interest payments are a business expense.
If a large order is stretching your cash flow, the BDC Purchase Order Loan can be a practical solution. Other federal and provincial financing programs may also help with inventory, growth, or working capital. GrantHub helps you compare hundreds of active grant and loan programs across Canada, so you can see which options fit your business before you decide.
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