You just landed a ₦15 million supply contract with a solid corporate client. The profit margin looks good. The delivery timeline is tight but doable.
Then reality hits: you need to pay suppliers upfront, but the client won’t release funds until after delivery. Your working capital is tied up in another job. The bank wants collateral you don’t have.
Like most contractors and suppliers, you probably face one of these:
- Purchase orders can’t be executed because you lack liquidity
- Banks that demand collateral worth more than the contract value
- Finance companies that take weeks to approve funding while your delivery deadline approaches
- Interest rates so high that your profit margin disappears
You’re not alone. Most contractors and suppliers face this gap between winning contracts and having the cash to execute them. LPO financing exists to bridge that gap, but picking the wrong lender costs you time, money, and sometimes the contract itself.
This guide breaks down the top 10 LPO financing companies in Nigeria, what each one offers, and how to pick the right one for your business.
The Top 10 LPO Financing Companies in Nigeria
1. Lukefield Finance
Best for: Businesses that need flexible working capital with straightforward terms
Lukefield Finance offers business loans with competitive rates and terms that make sense for contractors handling multiple projects. While they don’t exclusively market LPO financing as a standalone product, their business loan structure works perfectly for funding purchase orders and supply contracts.
What makes Lukefield different
They calculate interest per annum (not flat rate), which saves you money over the loan period. You can prepay without penalties if the client releases funds early. After you pay down one loan, your borrowing limit increases, making it easier to take on bigger contracts.
LPO financing approach
Lukefield structures business loans to cover working capital needs, including supplier payments for confirmed purchase orders. Their 24-hour processing time (once documentation is complete) means you can respond quickly when opportunities arise.
Pros:
- Interest calculated on reducing balance, so your cost goes down with each payment
- No prepayment penalties if you want to close the loan early
- Competitive annual interest rates (contact for specific rates based on your loan amount and tenure)
- Quick processing within 24 hours of complete documentation
- Borrowing limit increases after successful repayment, supporting business growth
- Licensed and regulated by CBN
Cons:
- Requires complete documentation upfront (though this is standard across the industry)
Ready to finance your next LPO? Apply now to get started.
2. The Brook Finance Company Limited
The Brook Finance specializes in LPO financing for contractors and vendors working with reputable organizations. They offer a 90-day maximum tenor with 60-day renewal options and promise disbursement within 48 hours of submitting required documentation.
Pros: Fast 48-hour disbursement, focused specifically on LPO financing, supports business growth and expansion through working capital access.
Cons: 90-day maximum tenor may be too short for complex supply contracts, the renewal process adds administrative work, and limited information about interest rates and financing percentages is publicly available.
3. Nathan Finance Company Limited
Nathan Finance has been financing local purchase orders since its inception. They finance up to 60% of your LPO value and focus specifically on supporting small businesses to execute contracts and raise needed project funds.
Pros: Clear 60% financing limit helps you plan capital structure, dedicated focus on small business success, established track record in LPO financing.
Cons: 60% limit means you need to raise 40% elsewhere, less information available about processing time and specific terms, and may require strong business documentation.
4. MezCredit
MezCredit provides purchase order funding for 30 to 180 days, financing up to 70% of the supply cost. They focus on SMEs with purchase orders from reputable Nigerian organizations and multinationals, with a maximum 90-day tenor and 60-day renewal option.
Pros: Longer tenure options (up to 180 days for some cases), finances up to 70% of supply cost, tripartite domiciliation agreement protects all parties, and research-backed lending decisions.
Cons: Loan amount capped at 70% of supply cost, requires an irrevocable tripartite agreement, which adds complexity, only for domestic (within Nigeria) purchases.
5. Vendor Credit
VendorCredit has become one of the go-to names for LPO and purchase-order financing in Nigeria, especially for SMEs that need fast access to working capital. They focus on helping vendors fulfil confirmed purchase orders without getting stuck on cash flow problems.
One of their biggest advantages is flexibility. VendorCredit offers funding up to ₦1 billion, depending on the size of the contract and the strength of the purchase order. They don’t require collateral or guarantors, and their application process is fully digital, so most of the back-and-forth that comes with traditional lenders is avoided.
Pros: Focused specifically on vendor financing needs.
Cons: Limited publicly available information about terms and processing times.
6. Dayspring Capital Investment Limited
Dayspring Capital provides LPO and asset financing for small and medium-sized businesses across all industries. They specialize in equipment, vehicles, and software purchases alongside traditional LPO financing, offering deals up to ₦20 million for small and middle ticket transactions.
Pros: Broad asset financing capabilities beyond just LPO, up to ₦20 million financing available, works across all industry sectors, and combines equipment leasing with working capital needs.
Cons: ₦20 million cap may be too low for larger contracts, combining LPO with asset financing may complicate the approval process, less specialized than pure LPO financiers.
7. FirstBank Nigeria
FirstBank offers Local Purchase Order Finance for SMEs with annual turnover up to ₦3 billion. The facility is designed for short-term financing to help small and medium retail customers carry out supply orders and maintain stock levels.
Pros: Backed by major bank infrastructure, suitable for businesses with turnover up to ₦3 billion, established reputation and regulatory oversight, and integrated with other banking services.
Cons: LPO must be from FirstBank-approved principals only (limits which contracts you can finance), requires domiciliation of business proceeds to the bank, traditional bank bureaucracy may slow processing, and likely requires an existing banking relationship.
8. Parallex Bank
Parallex Bank offers an LPO financing service built for businesses that already have verified purchase orders but need funds to execute them. Unlike many traditional banks that make this process long and exhausting, Parallex positions its facility as a practical way for companies to pay suppliers upfront and keep their supply chain moving without stress.
Their LPO financing is part of their broader business banking suite, so you’re getting a more structured, regulated option. This can be a plus for companies that prefer dealing with a bank rather than a private lender. Parallex focuses on helping businesses bridge that cashflow gap between receiving a purchase order and getting paid after delivery.
Pros: Banking institution backing provides security and regulatory oversight.
Cons: Limited publicly available information about specific terms, processing times, and financing percentages.
9. Sovereign Finance
Sovereign Finance offers LPO and invoice discount financing with tenures available up to 180 days. They promise a 48-hour turnaround time, low interest rates, and affordable, flexible repayment plans with 24/7 support availability.
Pros: Up to 180-day tenure for longer supply cycles, fast 48-hour turnaround time, flexible repayment plans, 24/7 customer support availability, and low advertised interest rates.
Cons: Limited specific details about financing percentages and approval criteria, “low interest” is relative and needs verification, and may have strict requirements for longer tenures.
10. SupremeMFB
SupremeMFB finances up to 75% of LPO value with a maximum 60-day tenor (though they mention 120 days for some schemes). They focus on suppliers in oil and gas, telecoms, multinationals, banks, and government MDAs, plus contractors and subcontractors. Funds are disbursed directly to procurement sources/vendors.
Pros: Finances up to 75% of LPO value (higher than many competitors), targets high-value sectors like oil and gas, disbursement goes directly to vendors (protects all parties), requires current account operation (builds banking relationship).
Cons: 60-day maximum tenor is quite short for complex supplies, must have confirmed LPOs from blue-chip or reputable companies only (limits which contracts qualify), requires domiciliation with a good margin for security, focused on specific high-value sectors which may exclude some businesses.
How to Choose the Right LPO Financing Company
Picking an LPO financier isn’t about finding the cheapest rate. It’s about matching the lender’s structure to your contract’s reality.
1. Match tenure to your contract timeline
If your client pays 90 days after delivery and delivery takes 30 days, you need at least 120-day financing. A 60-day facility forces you into expensive renewals or default.
Check: What’s your actual cash cycle from paying suppliers to receiving client payment?
2. Calculate the true cost
A 15% annual rate sounds better than 3% monthly until you realize 3% monthly is 36% annually. Always convert to an annual percentage rate for comparison.
Also factor in:
- Processing fees
- Commitment fees
- Insurance requirements
- Early repayment penalties (or lack thereof)
3. Verify financing percentage against your needs
If they finance 60% and you have zero capital, you’re stuck. If you can cover 30-40% yourself, that 60-70% financing works perfectly.
Check: How much of your own capital can you realistically deploy?
4. Test processing speed against your contract deadline
A great rate means nothing if approval takes 3 weeks and your supplier needs payment in 5 days. Know their actual turnaround time, not just what’s advertised.
5. Confirm your contract qualifies
Some lenders only finance LPOs from:
- Government agencies
- Blue-chip companies
- Their approved principals
- Specific sectors
Make sure your client and contract type fit their criteria before applying.
6. Understand the documentation requirements
Most LPO financiers require:
- Copy of the LPO or contract
- Proforma invoices from your suppliers
- Company CAC documents
- Recent financial statements
- Bank statements (3-6 months)
- Tripartite agreement (you, lender, client)
- Domiciliation letter from the client
Get these ready before applying to speed up processing.
7. Check flexibility for repeat business
If this is your first contract, or one of many, pick a lender who increases your limit after successful repayment. Building a relationship beats shopping for new lenders every time.
Red Flags to Watch For
- Rates that seem too good: If everyone charges 15-25% annually and someone offers 8%, verify what’s hidden in fees.
- Vague documentation requirements: Legitimate lenders have clear checklists. “We’ll tell you what we need after you apply” wastes your time.
- No regulatory oversight: Stick with CBN-licensed finance companies and banks. Unlicensed lenders have no accountability when things go wrong.
- Upfront fees before approval: Some processing fees are normal, but large upfront payments before approval are red flags.
- Pressure to decide immediately: Legitimate lenders give you time to review terms. High-pressure tactics signal problems.
Conclusion
LPO financing isn’t complicated, but picking the wrong lender turns a profitable contract into a nightmare of missed deadlines, lost deposits, and damaged client relationships.
Match the lender’s terms to your contract’s reality: tenure to payment timeline, financing percentage to your capital gap, processing speed to your supplier’s deadline. Ready to finance your next LPO? Start with Lukefield Finance for flexible terms and straightforward processing.