Fast growth can strain your cash flow. You receive a large customer order, but you need to pay suppliers long before your customer pays you. BDC Purchase Order Financing is designed for this exact gap, helping Canadian businesses fulfill confirmed orders without draining working capital. The Business Development Bank of Canada (BDC) offers this financing to support growth when timing, not demand, is the problem.
BDC Purchase Order Financing, officially called the BDC Purchase Order Loan, is a short-term, repayable loan that helps you pay suppliers and fulfill confirmed customer orders.
Here’s how it supports cash flow during growth:
This financing is tied directly to revenue-generating activity. It is not meant for speculative inventory or long-term expansion costs.
Eligible costs typically include supplier payments, inventory purchases, and other direct expenses required to fulfill the purchase order.
BDC focuses on established businesses that are already generating revenue. To qualify, your business must generally meet the following criteria:
BDC will also assess the reliability of your customers and suppliers, since repayment depends on the successful completion of the order.
Tools like GrantHub’s eligibility matcher can help you filter financing programs by business stage, province, and funding type in seconds.
BDC Purchase Order Financing is best suited for specific growth situations:
It is less suitable if:
If your growth challenge is timing, not sales volume, this loan can stabilize cash flow while you scale.
BDC requires firm customer orders. Forecasts or verbal commitments are usually not enough.
Only applying for supplier costs while ignoring shipping, duties, or production overruns can leave you short on cash mid-project.
This is short-term working capital. Using it for ongoing operating expenses increases repayment risk.
BDC looks closely at who will ultimately pay the invoice. Weak customer credit can delay or derail approval.
Q: Is BDC Purchase Order Financing a grant or a loan?
It is a repayable loan, not a grant. You must repay the borrowed amount plus interest.
Q: How much can I borrow through the BDC Purchase Order Loan?
Eligible businesses can access $100,000 to $750,000, covering up to 90% of eligible costs tied to the purchase order.
Q: What can the loan be used for?
Funds can be used for supplier payments, inventory purchases, and direct costs needed to fulfill confirmed customer orders.
Q: How long do I have to repay the loan?
Repayment terms can be up to 18 months, depending on the structure of your order and customer payment timeline.
Q: Are loan proceeds taxable income?
No. Loan proceeds are not taxable income, but interest payments are typically a deductible business expense.
BDC Purchase Order Financing helps address cash flow pressure when your business is growing quickly and needs to fulfill large orders. Matching the right financing to your stage of growth is key. Sign up for GrantHub to check your eligibility for BDC funding and other government programs that fit your cash flow needs.
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