Too Big to Accept? Why South African Small Businesses Are Turning Down the Orders That Could Grow Them

With rising input costs stretching working capital, BizFunding urges SMEs not to walk away from large purchase orders and tenders, and explains how purchase order funding can help them deliver.

For many South African small businesses, winning a large order is a mixed blessing. The contract that could transform the business also demands that suppliers, stock, staff and transport be paid for upfront, often weeks or months before the client pays. 

BizFunding, a Johannesburg-based business funding partner for SMEs, says too many capable businesses are turning down or not even bidding for significant work because they lack the cash to fulfil it, and is encouraging business owners to look at purchase order funding as a way to say yes.

The growth trap facing SMEs

Cash flow remains one of the biggest pressures on the country’s small businesses. In Xero’s 2026 State of South African Small Business survey, 62% of respondents said they had experienced cash flow problems over the previous year. At the same time, the cost of fulfilling an order has risen sharply. 

Inland wholesale diesel, a key input for transport, logistics, agriculture and manufacturing, climbed from around R19 a litre in October 2025 to almost R32 a litre in October 2026, pushing up what suppliers charge and increasing the capital a business needs before it can deliver.

The result is what BizFunding calls a growth trap. A business that has done the hard work of winning a new customer, whether a government department, municipality or large corporate, can find itself unable to buy the goods or materials to deliver. If it cannot fulfil the order, it risks losing both the contract and the customer relationship it worked to build.

“Winning the order is only the first step. Financing it is where many small businesses get stuck,” says a BizFunding spokesperson. “We regularly speak to owners who have stopped bidding for larger work, not because they can’t do the job, but because they can’t afford to fund it upfront.”

How purchase order funding works

BizFunding’s purchase order funding provides the working capital needed to fulfil a confirmed purchase order or tender, covering supplier costs, staff and project running costs. Instead of a traditional loan with fixed monthly instalments, BizFunding partners with the business on a profit-sharing basis, with a structure tailored to each project. Key features include:

• Suppliers paid directly. BizFunding pays the business’s suppliers on its behalf, so goods and materials are secured, and the order can be delivered on time.
  
• Repayment linked to the client’s payment. Funds are repaid once the end client pays, rather than through monthly instalments.
  
• A focus on the transaction. BizFunding assesses the quality of the deal itself, including the end client, the suppliers and the profitability of the order.
  
• Hands-on support. A dedicated agent works side by side with the business owner to help plan and execute the order, building expertise the business can use on future contracts.
  
• Transparent fees. Fees are fixed and agreed upfront, so the business knows exactly what the funding will cost before it proceeds.

Funding is available for start-ups as well as established small and medium-sized businesses.

More than money

“Business finance shouldn’t just be about handing over money,” says the BizFunding spokesperson. “We work as a partner on each order, and because we’re only repaid when the client pays, our interests are aligned with the business owner’s from start to finish.”

Advice for business owners

BizFunding advises SMEs considering purchase order funding to have a confirmed, written purchase order or tender award in place, to obtain clear quotes from reliable suppliers, and to know their margins on each order. Businesses should also ensure that their company registration, tax and FICA documents are up to date, as these will be needed to verify the transaction and draw up an agreement.

Don’t let a lack of cash cost you the contract

With costs rising and competition for contracts intense, South African SMEs cannot afford to let promising orders slip away. Business owners who have secured a purchase order or tender can find out more about BizFunding’s purchase order funding here.

About BizFunding

BizFunding is a Johannesburg-based business funding partner for South African businesses. Rather than offering traditional loans, BizFunding works alongside its clients on a partnership basis, providing working capital and hands-on support so they can fulfil purchase orders and tenders, bridge the gap between invoicing and payment, and take on larger opportunities with confidence. 

Its services include purchase order funding, tender funding, funding against invoices, and funding against vehicles and business property. Each client is supported by a dedicated agent throughout the process. For more information, visit https://www.bizfunding.co.za/. 

Media Contact

• Tel: 010 157 2499
  
• Email: info@bizfunding.co.za
  
• Web: www.bizfunding.co.za
  

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Tags: Press Release, purchase order funding, sme funding south africa, south africa, tender funding