What is proof of funds (pof) & where to use it

What Is Proof of Funds (POF) & Where to Use

It?

• A Proof of Funds Letter is not commonly used in consumer products for purchases and financing. It may also be used in the preliminary stages of credit enhancement when applying for financing or attempting to engage a party for several purposes.

• In commercial financing a POF helps meet underwriting reserve requirements. Proof of Funds, sometimes referred to as a POF.

What is a ‘Proof of Funds’ (POF)?

It is a financial document, usually a statement or letter, which shows one party to the next to complete a given transaction.

• It is most often provided by the account holder's bank in the form of a bank letter specific to the transaction.

• A POF may also be used in the preliminary stages of credit enhancement when applying for financing or attempting to engage a party for several purposes.

• Most Proof of Funds statements are based on a cash account, or the funds in a cash-backed bank account requiring account verification.

• Individuals can purchase or lease proof of funds on a short term

or long term basis's on paper if necessary.

• Providers for proof of funds can provide as little as $10,000 up to $10,000,000 and more depending on the supplier for the Proof of Funds.

There are a few ways acceptable to lenders and sellers to show P.O.F.

• Bank Statements or Bank Verification

• Brokerage Account Statements or Verification

• Escrow Account Verification