To fund a solar project before your customer pays, use order-based financing to bridge the gap between paying your suppliers now and being paid by your client later. PO Finance funds the purchase of materials against your confirmed order, up to 100% of its value, so you can pay suppliers without waiting on the customer milestone; Trade Finance covers imported materials and pays overseas suppliers safely; invoice discounting releases cash from milestones you have already invoiced. The gap between supplier payment and client payment is the defining cash problem in solar, and closing it with order-attached financing, rather than your own reserves, is how you take on projects larger than your cash balance.
”- The core problem: you pay suppliers up front, but the client pays against milestones later.
- PO Finance funds the material purchase against your confirmed order, up to 100%.
- Trade Finance covers imported materials and pays overseas suppliers safely.
- Invoice discounting releases cash from milestones you have already invoiced.
- Closing the gap with financing, not reserves, lets you take projects bigger than your cash balance.
The gap between paying and being paid
Every solar project has the same built-in cash problem. You have to pay your suppliers up front, for modules, inverters and the rest of the bill of materials, often before you break ground. But your client pays you against project milestones, spread over the build. Between those two points sits a gap, sometimes weeks, sometimes months, where your cash is out and no revenue has come in.
That gap is the single defining financial challenge in solar contracting. It is why a profitable, growing EPC can still run out of cash, the profit is real, but it is locked in a project that has not paid yet. This is the mechanism behind why solar EPCs run out of working capital, and closing it is the whole game.
PO Finance: pay suppliers before the client pays you
The most direct tool for the gap is Purchase Order Finance. It funds the purchase of materials against your confirmed order, up to 100% of its value, with a decision in around 48 hours. So you can pay your suppliers now, fulfil the project, and settle the financing when your client pays.
Because it is underwritten on the strength of the order rather than your balance sheet, it does not dilute equity and it scales with your order book. It is the direct answer to "I have the project but not the cash to buy the materials". See what is purchase order financing and the PO Finance program.
Trade Finance and invoice discounting
Two further tools address specific parts of the gap:
- Trade Finance and LC, if your materials are imported, this pays the overseas supplier safely and can lock the INR rate. See Trade Finance and how to import solar panels into India.
- Invoice discounting, once you have hit a milestone and invoiced the client, this releases that cash immediately instead of making you wait for their payment term, shortening the gap from the other end. See Invoice Discounting.
| Point in the gap | Tool |
|---|---|
| Paying suppliers for materials up front | PO Finance |
| Paying an overseas supplier for imports | Trade Finance & LC |
| Waiting on an invoiced milestone | Invoice Discounting |
Close the gap from both ends
The most effective approach uses these together, closing the gap from both ends. PO Finance and Trade Finance fund the front, paying suppliers before the client pays. Invoice discounting funds the back, releasing invoiced milestones before the client's term expires. Between them, they can cover most of the gap, keeping your own reserves free for the costs financing cannot reach.
This is what lets you take on a project larger than your cash balance: the project's own order funds its materials, and its own milestones fund its cash flow, rather than your balance sheet carrying the whole weight. See how to get working capital for a solar order and PO Finance vs invoice discounting vs vendor payment.
Source and fund in one motion
The cleanest way to close the gap is to source and finance together. On VyaparCred, you post an RFQ, accept the best verified quote, and attach financing to that order, so the materials are funded at the moment you commit to them, not weeks later through a separate process. The roughly 48-hour decision means you can move while the quote is live, see how fast can I get trade finance approved.
If you are running several projects at once, the same logic scales, see how to finance multiple solar projects at once.
Fund the project before the client pays
VyaparCred lets you source materials and attach financing to the order in one flow, so the project's own order funds its materials, before the client's first milestone.
PO Finance funds the material purchase up to 100%, before the client pays.
Trade Finance pays overseas suppliers safely and locks the INR rate.
Invoice discounting releases invoiced milestones, closing the gap from both ends.