13 September Factors to consider when seeking PPE Finance

The year 2020 has shaped up to be quite a roller-coaster for many business, not the least for trade businesses – wholesalers, importers and exporters all over the world. Orders for personal protective equipment (PPE) such as face masks, shields, gowns, gloves and sanitizers are changing hands at a frenzied speed. Everyone from governments, hospitals, private companies and individuals are looking for and placing orders for PPE. However, many distributors and suppliers of PPE are having major problems procuring critical PPE as many of the manufacturers demand either 50% deposit or 100% proof of funds. Without such having such funds ready at hand, many distributors are forced to miss the opportunity to service their clients. How can borrowers plan for and obtain the critical financing needed to procure PPE? Below are some general guidelines that can help you move in the right direction.

1. Show legitimate contracts/ requirements

Because of the enormous demand for PPE, there have been numerous scams and fraudulent companies that have cropped up overnight claiming to be “guaranteed supplier” and “direct to source”. This has hurt the legitimate players immensely and hence to rise above the noise it is imperative that you show proof of valid business registrations, supplier vendor ID, and verifiable purchase orders from reputed buyers. 

2. Use the best funding option

PPE has rapidly become the Wild West of trade and each one of the manufacturers have come up with their own standard operating procedures (SOP). This makes it extremely difficult for an importer to stick with a single funding option. For example, manufacturers in Vietnam might be ok to take a Letter of Credit (LC), while similar manufacturer in Malaysia may require 50% deposit to ship the goods.  Work with a knowledgable financial intermediary like Ready Commercial Capital to navigate the vast array of funding options available at your disposable because no two PPE deals will be the same. Factors that lenders take into consideration include but are limited to – your business history, time in business, whether you are dealing with reputed manufacturer, who you are selling to and finally, your financials. 

3. Manage risk 

Once you have the decided on the right funding option, the next step is to make sure you have an air-tight transaction that will not leave you exposed to unnecessary risks. it is critical that you engage with FDA-approved and certified factories. You need to understand the factory’s production capacity and payment terms before production even begins.  It is imperative that you make sure that the products are sourced and purchased from authorized factories, properly inspected and that goods are never out of authorized sight until they are shipped. The manufacturer or supplier as well as the importing distributors need to have proper permits for import of PPE. Letters of credit are a great way to mitigate risk by requiring that certain conditions be met before payment can be released to the supplier. With fraud rampant in the PPE trade market it’s a good idea to make sure all aspects of the supply chain are predictable and insured. 

Summing Up

Below are some general items that you should plan to provide when seeking PPE finance.

    1. A verifiable purchase order from a reputable end-buyer.  
    2. The supplier should have prior experience selling and manufacturing PPE. 
    3. Manufacturer/Supplier needs to be FDA certified. 
    4. Freight forwarder should comply with all FDA regulations and import documentation to ensure goods will be cleared in US customs. 
    5. 3rd party inspection and certification of goods. 
    6. Personal guarantees of the borrower may be required. 


PPE is essential and critical to maintain the safety of the healthcare workers on the frontline. Any distributor or supplier that is interested in importing PPE currently faces major challenges that stem from extreme increase in demand paired with inadequate manufacturing capacity. The distributors are required to provide proof of funds in order to secure their orders. There are few key steps that any borrower interested in PPE finance should keep in mind. A financial intermediary like Ready Commercial Capital can help them prepare for and obtain financing from alternate finance lenders. Finally, importers and distributers for PPE should setup a proven standard operating procedure to make sure they are not exposed to risk.

Reach out to Ready Commercial Capital today to learn more. Call (800) 303-0771