LPO / LSO FINANCING
FINANCING CRITERIA
Amount: - Minimum Kshs 5 Million to Maximum Kshs 50 Million
Interest: - 1 % per month
Repayment: - 90-120 Days
Funding: - Up to 90-100% of the LPO amount
Local Purchase Order (LPO) and Local Service Order (LSO) financing refers to financial arrangements where a business obtains funding based on the purchase order or service order it receives from a customer or client. We offer this financing solutions particularly to businesses or individuals that face cash flow constraints and need immediate funds to fulfill orders or contracts. Our LPO and LSO financing is a valuable tool for businesses looking to manage their cash flow effectively and fulfill customer orders without delay. As with any financing arrangement, businesses should conduct due diligence, understand the terms of the financing, and choose Larseng Financing as we are reputable lenders.
Process
A business/individual receives a purchase order from a customer for the supply/services of goods.
Instead of waiting for payment from the customer, the business seeks LPO / LSO financing from a financial institution or lender (Larseng Financing).
Larseng Financing (the lender) evaluates the creditworthiness of the business,
viability of the service contract and the reliability of the customer
If approved, we provide funds to the business to fulfill the purchase order.
Once the goods are delivered or the services are provided, the customer pays the business.
The business repays Larseng Financing with the proceeds received from the customer.
Key Features of our LPO and LSO Financing:
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Collateral: The purchase order or service order collateral for the financing.
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Cash Flow Support: LPO and LSO financing help businesses bridge the gap between incurring costs to fulfill orders and receiving payment from customers.
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Customer Credit Risk Mitigation: Larseng Financing assesses the creditworthiness of both the borrowing business and the customer, mitigating the risk of non-payment.
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Quick Turnaround: These financing solutions are often characterized by quick approval and disbursement processes, enabling businesses to respond promptly to customer orders.
Local Purchase Order (LPO) Types we offer
This is the most common type of LPO, used for the straightforward purchase of goods. It includes details such as the item description, quantity, unit price, and total amount.
A blanket LPO is used for ongoing or repetitive purchases from a specific supplier. It outlines a set period during which the buyer can place multiple orders without creating new purchase orders each time
In cases where a long-term agreement is in place, a contractual LPO is issued. It typically outlines terms and conditions, pricing, and other contractual obligations between the buyer and the supplier.
This type of LPO includes a schedule specifying the dates on which goods or services are expected to be delivered or performed. It helps in managing the timing of orders.
A framework LPO is used when the buyer intends to purchase a variety of goods or services from a single supplier over a specified period. It provides a framework for subsequent orders.
Local Service Order (LSO) Types we offer
Similar to a standard LPO, this type of LSO is used for the procurement of specific services. It includes details such as the scope of work, service description, duration, and payment terms.
Issued for ongoing maintenance services, this type of LSO outlines the tasks to be performed, the frequency of maintenance, and any specific requirements.
When businesses engage consultants or professional services, a consulting LSO is issued. It details the scope of the consulting services, deliverables, and compensation.
Used for ongoing subscription-based services, this LSO outlines the terms of the subscription, payment terms, and any specific conditions related to the service.
When services are required for a specific project, a project-based LSO is issued. It includes details about the project scope, milestones, deliverables, and payment terms.
Issued when training services are needed, this LSO outlines the training program, duration, location, and any materials or resources required.
Our Target Clients
Our Clientele includes all persons who have obtained Purchase order or Letters of award to
deliver goods or services or carry out contractual works and require funding to execute their
contractual obligations.
Minimum Requirements for LPO/ LSO Financing
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Valid Business Registration and Permit Documents
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A valid Local Purchase Order/Local Service Order duly signed and stamped by the procuring entity i.e. public institutions [listed in the public procurement and disposal Act]
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Duly signed Letter of Undertaking and acceptable collateral as per bank’s Credit Policy. Acceptable collaterals are bank guarantee, shares or motor vehicle.
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Certified copy of the letter by the supplier to the procuring entity requesting payment
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Banking Relationship documents with a local bank of up to 6 months
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Valuation Report where applicable
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Audited accounts for amounts above 5 M
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List of completed past contracts