BizFunding offers purchase order financing for small business in South Africa. This empowers businesses to deliver on purchase orders, paying suppliers on time and fueling business growth – without requiring that they start with significant amounts of cash in the bank.
Below we consider…
- how purchase order financing works
- funding challenges for small businesses in South Africa
- how purchase order funding can help
- how it compares to other funding alternatives
- what you need to qualify.
How purchase order financing works
If your business has a purchase order, you can use it to secure working capital. Then you can use this capital to cover the costs of fulfilling the order.
This makes it possible to compete with larger, more “cash rich” companies. You can accept orders you know your team can fulfil, without needing a lot of available capital. The funding can equip you to pay suppliers and other costs so you can meet specifications and deliver on time.
The funding provider doesn’t charge interest or a fee.
Instead, you partner with the funder, agreeing to share the profits. You pay the funder only after the order is completed successfully and your business is paid.
The challenges for small businesses in South Africa
Cash flow is one of the greatest challenges facing SMEs in South Africa.
Traditional lenders, such as banks, make it difficult for small businesses to access funding. For example, they commonly require up to three years’ worth of financial records and a solid business credit rating – things that many newer businesses aren’t able to provide.
At the same time, small businesses face challenges that can lead to cash flow shortages. These range from late payments (which, unfortunately, are extremely common in South Africa) to sudden price increases in materials.
If a cash flow shortage hits after a purchase order is accepted, it can lead to late or suboptimal delivery, or complete failure to meet the order.
In turn, this can cause long-term reputational damage.
Without liquidity, even the most innovative and skilled small businesses can’t compete.
How purchase order financing can help small businesses
Purchase order financing, or PO financing, can fuel business growth.
It does this by enabling small businesses to fulfil lucrative orders and, in the process, build solid relationships with suppliers and customers.
With this type of funding, you can…
- ensure existing orders are delivered on time
- expand your business by taking on more orders and customers
- access instant cash flow to purchase stock or materials.
Comparing purchase order financing to other funding types
PO financing has a number of advantages over traditional funding alternatives in South Africa.
Instead of simply borrowing funds, you partner with a finance provider that’s experienced in helping small businesses meet order requirements, successfully and on time.
Key benefits for small businesses:
- no financials, credit checks or time in business needed to qualify
- no delays; apply in minutes and get same-day approval
- up to 100% funding of purchase orders
- no monthly repayments or instalments; you only pay back when you get paid
- no hidden costs or fees.
What you need to qualify
Any business, including a small business or startup, can secure purchase order or tender finance if it has a qualifying purchase order or award letter.
Small business PO funding with BizFunding
BizFunding offers up to 100% purchase order financing for small business. Apply in minutes and receive a same-day proposal.
For more information, call us on 012 001 0095 or go ahead and apply online now.
