"Show me the money" isn't just a movie line. In commodity trading, it's a formal step, and if you've been asked for one recently, it's usually a good sign — not an insult.
What a Proof of Funds actually is
A POF is documentation showing a buyer genuinely has the funds available to complete a purchase, verified before the seller commits time, product, or logistics to the deal. Sourcing and allocating a real shipment — say, fifty thousand metric tons of urea sitting at a port — costs real money and real time. No serious seller wants to hold product for a buyer who can't actually close.
Why it protects sellers
Every hour a seller spends negotiating with a buyer who was never going to pay is an hour not spent on a deal that would. POF verification, done properly, filters that out early. It's table stakes for being taken seriously as a buyer, not an optional courtesy.
Why it should protect buyers too — and often doesn't
Here's the part that trips people up: scammers ask for POF as well. Requesting proof of funds is one of the easiest ways to make a fake deal feel legitimate, because it mimics exactly what a real one does. So POF alone isn't evidence you're dealing with someone real — it's the bare minimum, and it should go both ways.
A legitimate POF process looks like:
- Bank-to-bank verification. Your own bank confirms the position directly with the counterparty's bank or a neutral verification service — not a screenshot emailed as an attachment.
- Mutual disclosure. If you're proving funds, the seller should be producing their own documentation in return — an SGS report, a refinery certificate, something that establishes the product is real too. POF shouldn't be a one-directional interrogation.
- A reasonable sequence. POF verification happening before any of the seller's own documentation is a pattern worth noticing, not automatically damning, but worth noticing.
A shady version looks like: "just email us a PDF bank statement," with no verification path offered, requested before the seller has shown anything about the product at all.
Where it fits in the deal lifecycle
This isn't a one-off request that happens whenever someone feels like it — POF verification is a distinct, expected stage in how a serious deal progresses, sitting between the letter of intent and the binding sales agreement. Treating it as a checkpoint rather than an ad-hoc demand is exactly why CommodityOS models it as its own deal stage, Funds Verified, sitting between LOI and SPA rather than getting lost somewhere in a WhatsApp thread.
Combined with counterparty verification and trust scores that build over time, POF stops being something you re-prove from scratch on every single deal with every single new counterparty — it becomes part of a track record.
POF is the trade finance equivalent of a bouncer checking ID. Mildly annoying, occasionally insulting if you look younger than you are, and yes — still necessary.
Looking for other terms? See the full Commodity Trading Glossary.