Purchase Orders, Contracts, and Invoices: What Lenders Look For

Receivables-backed financing starts with documentation.

A lender needs to understand what money is owed, who owes it, why it is owed, when it is due, and whether payment is likely.

For creative businesses, the core documents are often purchase orders, contracts, statements of work, and invoices.

Purchase orders

A purchase order is a document issued by a customer authorizing a purchase, project, or service.

A lender may review a purchase order to understand:

• Customer name
• Vendor name
• Approved amount
• Scope or description
• Purchase order number
• Payment process
• Billing requirements
• Whether the purchase order matches the invoice

A purchase order can be useful, but it may not be enough on its own. The lender may also need the underlying agreement or invoice.

Contracts

A contract defines the relationship between the business and the customer.

A lender may review:

• Parties to the agreement
• Scope of work
• Payment amount
• Payment terms
• Cancellation rights
• Approval process
• Deliverables
• Dispute provisions
• Assignment restrictions

The contract helps the lender understand whether the receivable is enforceable and whether there are risks to payment.

Invoices

An invoice is a request for payment.

A lender may review:

• Invoice amount
• Invoice date
• Due date
• Payment terms
• Customer name
• Description of work
• Related purchase order or contract
• Payment instructions
• Whether the invoice has been approved

The invoice should be consistent with the contract or purchase order.

Supporting documents

Depending on the receivable, supporting documents may include:

• Proof of delivery
• Client approval emails
• Campaign reports
• Completion confirmations
• Bank statements
• AR aging reports
• Payment history
• Vendor portal screenshots

Supporting documents help reduce uncertainty.

Common documentation issues

Funding can be delayed by:

• Missing signatures
• Conflicting payment terms
• Incorrect customer names
• Invoices that do not match contracts
• Missing purchase order numbers
• Unclear deliverables
• Unconfirmed approvals
• Known disputes

Organizing documents before applying can help speed up review.