When childhood friends Jennifer Kelly and Rebecca Perren launched Pehr Designs in 2010, they had a clear vision: creating classically simple yet modern home accessories and children’s lifestyle products. What they didn’t anticipate was how quickly their success would outpace their ability to finance growth. Their journey from self-funded startup to internationally recognised lifestyle brand showcases the transformative power of PO financing solutions.
From Success to Cash Flow Crisis
Pehr Designs quickly gained traction in the lifestyle market, but growth created unexpected challenges. “We were self-financing, but as we got more sales, I had about $150,000 in A/R that I wasn’t going to see for at least 60 days,” Rebecca Perren recalls.
The female-founded company, designed in Canada and responsibly produced in India, was securing major retail partnerships with Anthropologie and Indigo Books. However, these opportunities came with a catch. “Business was on a roll, and we were getting larger exclusive POs from customers,” says Perren. “We needed to take commitments to factories, and the bridging period was hard for us to manage.”
This scenario perfectly illustrates why PO financing has become essential for growing Canadian businesses: strong sales growth coupled with extended payment cycles creating working capital constraints.
How PO Financing Solutions Transformed Their Business
Purchase order financing provides upfront capital to fulfill confirmed customer orders, focusing on customer creditworthiness rather than historical financial performance. For Pehr, this proved transformational.
During an 18-month period, PO financing provided $250,000 to purchase raw materials, while factoring covered over $900,000 in accounts receivable across more than 50 fundings.
The PO Financing Process in Action
“Jonathan and his team helped us access cash up front, made payments when needed, improved our timing to get receivables, and set up payment cycles with our factories to get the business moving,” Rebecca explains.
The process enabled Pehr to:
- Accept larger orders without cash flow constraints
- Maintain supplier relationships through prompt payments
- Scale operations while preserving ownership
- Build the foundation for traditional bank financing
Strategic Benefits: More Than Just Capital
Professional Partnership Over Transaction Processing
Pehr’s founders prioritised education and ongoing support when selecting their PO financing provider. “We considered other alternatives, but ultimately chose Jonathan and his team because they took the time to help us understand the philosophy behind factoring and remained involved every step of the way,” Perren notes.
Scalable Growth Without Equity Dilution
Unlike traditional loans with fixed limits, or new equity partners with dilution, PO financing capacity grows with confirmed purchase orders. This scalability proved crucial for Pehr’s expansion strategy, enabling them to accept increasingly larger orders from major retailers while maintaining full ownership.
The Bridge to Traditional Banking
One of the most compelling aspects of Pehr’s story is how PO financing served as a bridge to traditional bank financing. With 5X sales growth and an improved balance sheet, Perren credits the alternative financing for Pehr’s graduation to bank financing.
This demonstrates how specialised financing solutions complement rather than compete with traditional banking. “Canadian businesses should take advantage of PO financing and A/R factoring when they don’t yet qualify for bank financing. It’s easy, efficient, and really helped our business grow,” Rebecca advises.
Where PO Financing Excels: Industry Applications
Pehr’s success illustrates why PO financing solutions work particularly well for:
Consumer Goods and Lifestyle Brands: Companies serving major retailers face significant cash conversion cycles between supplier payments and customer receipts.
Import/Export Businesses: International trade creates extended cash commitment periods requiring financing bridges.
Seasonal Businesses: Companies with demand spikes need substantial working capital during peak periods.
Custom Manufacturers: Project-based businesses benefit from PO financing’s flexibility in handling variable order sizes (requires outsourced manufacturing).
Qualification and Implementation
Key Requirements
Successful PO financing typically requires:
- Creditworthy customers with strong payment histories
- Gross margins of 20%+ to ensure profitability after financing costs
- Established operations with proven fulfillment capabilities
- Clear growth opportunities justifying working capital investment
Best Practices
Start Early: Explore options before cash flow constraints limit growth opportunities.
Build Relationships: Work with providers offering strategic partnership rather than simple transactions.
Plan Strategically: Use PO financing as part of broader financial strength building.
Capitally: Canada’s Leading PO Financing Provider
As demonstrated through success stories like Pehr Designs, Capitally has established itself as Canada’s premier provider of PO financing solutions, offering:
- Comprehensive industry experience across multiple sectors
- Flexible financing structures from $100,000 to $10 million
- Professional service with dedicated account management
- Advanced technology platforms with real-time visibility
- Complementary banking relationships that strengthen existing financial partnerships
Serving businesses across Canada, Capitally understands regional dynamics while providing national-level expertise.
From Startup to Global Success
Today, Pehr is recognised as one of the fastest-growing children’s lifestyle brands in North America, with domestic and international retail partners. Their success demonstrates how PO financing solutions transform growth constraints into competitive advantages.
Key Takeaways:
- Cash flow timing matters even for profitable businesses
- Alternative financing complements traditional banking effectively
- Education and partnership are essential for success
- Strategic implementation leads to improved financial strength
Ready to Scale Your Business?
If your Canadian business faces similar challenges—strong customer demand coupled with cash flow constraints—PO financing solutions may provide the strategic advantage you need.
Don’t let working capital limit your growth opportunities. As Rebecca Perren concludes, “Canadian businesses should take advantage of PO financing and A/R factoring when they don’t yet qualify for bank financing. It’s easy, efficient, and really helped our business grow.”
Contact Capitally today to explore how PO financing solutions can support your growth objectives while building the financial foundation for long-term success in Canada’s competitive marketplace.
