What is Proof of Funds (POF)?
Proof of Funds (POF) is documentary evidence that a buyer holds, or has access to, the money required for a transaction. Sellers request it before allocating cargo or releasing sensitive supply-chain information.
At a glance
| Term | POF (Proof of Funds) |
|---|---|
| Definition | Bank-issued document evidencing buyer's available funds. |
| Category | Payment & banking |
| Related terms | LC (Letter of Credit), MT-103, MT-700, MT-799, T/T Payment, BCL (Bank Comfort Letter), Performance Bond |
What it is used for
POF filters serious buyers from speculative ones. It is the buyer-side counterpart to the seller's proof of product, and the two are usually exchanged at a similar stage.
Key points
- Common formats: a recent bank statement, a bank letter on letterhead, or a bank-to-bank SWIFT message.
- Should be recent, name the account holder, and state currency and available balance or facility.
- A credit facility letter can serve as POF where the buyer is financing the purchase rather than paying from cash.
- Bank-to-bank verification is stronger than any document handed over by the counterparty.
What to watch for
- PDF bank statements are trivially forged. Prefer bank-to-bank confirmation, or verification directly with the issuing bank.
- Redaction is normal and reasonable — account numbers are commonly masked, and that alone is not suspicious.
- A POF proves funds existed at a moment in time. It does not commit those funds to your transaction.
Frequently asked questions
What is the strongest form of proof of funds?
A message sent bank to bank, or a letter your own bank verifies directly with the issuing bank. Anything emailed as a PDF should be treated as unverified until checked.
Is a Bank Comfort Letter the same as proof of funds?
No. A BCL comments on the buyer's standing and capacity; it is not a statement of a specific available balance, and it is not a payment undertaking.
Should I send proof of funds to any seller who asks?
Only to counterparties you have verified. Financial documents are used to build convincing impersonations, so treat them as sensitive.
Related terms
Lodfy verifies every company on the platform — registration, ownership and sanctions screening — before they can trade.