Purchase order financing examples
BizFunding offers businesses purchase order funding so they can fulfil purchase orders. Considering some purchase order financing examples can make it clearer how this works – and how this kind of funding allows South African businesses to grow.

Below, find out more about how purchase order funding…

Purchase order funding for a construction firm

Alex started a Jo’burg construction business specialising in creating cost-effective modular buildings for a range of industries, from healthcare to education.

So far, business has been slow – but then the company receives an order for modular units across four provincial hospital sites.

Alex’s company has the know-how to do the work well. However, there isn’t enough cash to cover the material and labour costs.

A business loan from a bank isn’t a possibility. The company hasn’t been operating for long enough and doesn’t (yet) generate high enough annual revenue to qualify.

Instead, Alex uses the contract to get purchase order funding.

Alex can then pay suppliers, contractors and staff on time – and complete the work to spec.

This positions his company for more lucrative contracts, across SA’s provinces.

PO financing for a business offering energy solutions

Thabo’s startup installs cost-effective lithium battery banks, UPS systems and generators in residential and commercial settings.

With South African load shedding, demand for backup energy solutions is sky-high.

When Thabo’s company gets an order for a backup power installation on behalf of a local municipal water treatment plant, his company is already operating near full capacity. The company is also waiting for two significant payments to come in, so they are short on cash.

Thabo recognises that ignoring an opportunity for growth would be a mistake. So he and his team plan exactly what they need to fulfil the order and bid for the contract.

His company is then awarded the tender to do the work.

Then Thabo uses the signed order to get purchase order financing. (Alternatively, he could choose to get bridging finance, in the form of an advance on the invoices for which payment is due).

The funding covers the cost of the necessary equipment and of installers who are suitably qualified to assist with the installation.

Thabo’s company benefits from a million-rand project – and he pays back the funding partner only after his company receives payment from the plant.

PO funding for a local furniture manufacturer

Rhea owns a business that supplies furniture. Her business receives a large order for office furniture from a government department.

The department needs furniture, including chairs and partitions, at all of its branches, countrywide.

Rhea has an experienced team – but there’s not enough cash in the company account to pay suppliers for the stock or hire a truck for the deliveries. So, she applies for purchase order funding.

The funding provider doesn’t charge any interest or monthly installments. Instead, the provider partners with Rhea’s business, providing the needed funds and helping ensure that everything gets purchased and delivered on time.

This makes it possible for Rhea to fulfil the order without having to stress about how big the order is or monthly repayments as she will only have to pay back the funder when she gets paid – and this now puts her business in line for future orders.

Purchase order financing from BizFunding

BizFunding offers purchase order financing to South African companies, including small businesses and startups.

Here’s how it works:

Unlike traditional funders, we don’t worry about your credit profile, time in business or any financials. Instead, it’s a qualifying purchase order and your ability to fulfil it that secures funding.

At BizFunding, we don’t charge interest or fees. Instead, we partner with clients, making it possible for them to fulfil orders. We also get involved in the execution of the work, playing a hands-on role to make sure things get done correctly and on time.

Once an order has been successfully fulfilled and a client gets paid, we take an agreed share of the profits.

Some advantages of our purchase order funding model:

  • easy application process (get approved in minutes)
  • tailor-made profit-sharing model, with no hidden costs or fees
  • only pay us back when you get paid.

We also offer advances on invoices that are due to be paid. This form of bridging finance can give businesses the working capital they need while they’re waiting on payments.

Call BizFunding on 012 001 0095 to discuss your purchase order financing needs or go ahead and apply online now.

If you are a business owner on the road to success, or need funding to help start new projects or purchase orders, we can help you!

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