Seen Here: Gavin Tarr, Head of Working Capital Solutions at FNB Commercial Structured Finance Solutions, says expanding access to purchase order financing can help SMEs bridge critical cash-flow gaps, enabling businesses to fulfil confirmed orders, unlock growth opportunities and contribute to South Africa’s economic development. Photo Credit: Supplied
JOHANNESBURG – Small and medium-sized enterprises (SMEs) across South Africa that have secured confirmed purchase orders but lack the upfront capital to fulfil them could soon find it easier to access funding, following a new referral arrangement between FNB and Sourcefin.
The collaboration is designed to help eligible businesses bridge one of the biggest barriers to growth—cash flow—by providing access to purchase order (PO) financing that enables them to deliver on confirmed contracts before receiving payment from customers.
The initiative aims to empower entrepreneurs to seize growth opportunities instead of turning away business due to funding constraints.
Addressing a critical funding gap
Many SMEs experience a common challenge: winning contracts or purchase orders but lacking the working capital needed to buy stock, pay suppliers, manufacture products or deliver services before payment is received.
Without access to finance during this critical stage, businesses are often forced to decline lucrative opportunities or seek costly alternative funding.
Through the new referral arrangement, FNB business clients who meet the necessary criteria can now be referred to Sourcefin, where they may be considered for purchase order financing based on Sourcefin’s independent assessment and approval processes.
Unlike conventional lending, purchase order financing is linked directly to confirmed business that has already been secured, making it a practical funding solution for businesses with proven demand.
Helping businesses turn orders into income
Under the arrangement, eligible FNB clients can approach their relationship manager or business banker to request a referral to Sourcefin.
Once referred, Sourcefin independently validates the purchase order, conducts due diligence on all parties involved, performs fraud checks and assesses the funding application according to its own credit and risk criteria.
If approved, the funding enables businesses to purchase materials, pay suppliers and complete delivery before receiving payment from their customer.
Importantly, FNB does not approve, assess or fund these applications, and a referral does not guarantee funding.
Seen Here: Joshua Kadish, CEO and Co-founder of Sourcefin, believes giving SMEs access to funding against confirmed purchase orders empowers entrepreneurs to turn business opportunities into sustainable growth, creating jobs and strengthening South Africa’s small business economy. Photo Credit: Supplied
Strong track record supporting SMEs
Sourcefin says it has already deployed more than R3 billion in funding to over 1,000 SMEs across South Africa during its first five years of operation.
Beyond financing, the company also provides funded businesses with access to a global network of more than 2,000 pre-vetted suppliers, helping entrepreneurs source products and successfully fulfil contracts.
This combination of funding and procurement support is designed to improve business performance while enabling long-term growth.
Unlocking opportunity through partnership
Gavin Tarr, Head of Working Capital Solutions at FNB Commercial Structured Finance Solutions, said many businesses already have customers and confirmed work but struggle when it comes to financing delivery.
“Many businesses are doing the right things—securing customers and confirmed orders—but struggle with cash flow at the point they need to deliver,” Tarr said.
“By enabling access to purchase order financing through this referral arrangement, we are helping SMEs unlock cash flow when it is most needed.”
Turning confirmed demand into sustainable growth
Joshua Kadish, CEO and co-founder of Sourcefin, said the partnership addresses one of the most significant obstacles facing growing businesses.
“Sourcefin exists to enable SMEs,” Kadish said.
“These businesses often have real work in hand but get stuck at the point of execution. Working with FNB brings trusted banking reach together with open-minded funding, so more entrepreneurs can convert confirmed demand into delivery and sustainable business growth.”
How purchase order financing works
A typical example involves an SME that receives a confirmed order to supply school furniture.
Although the business has secured the contract, it may not have enough cash available to buy the desks, pay manufacturers or arrange transport before the customer settles the invoice.
Through the referral arrangement, the business can apply to Sourcefin for funding against the confirmed purchase order, allowing production and delivery to proceed without placing unnecessary strain on cash flow.
Once the customer pays after delivery, the financing arrangement is settled according to the agreed terms.
Complementing traditional business finance
FNB emphasises that the referral arrangement does not replace its existing business loans, overdrafts or trade finance products.
Instead, it fills a specific funding gap by supporting businesses that have already secured work but require short-term capital to execute their contracts.
The solution is particularly relevant for SMEs operating within both public and private sector supply chains, where payment is often only made after goods or services have been delivered.
Supporting entrepreneurship and economic growth
As South Africa continues to prioritise SME development as a driver of economic growth and job creation, innovative financing models such as purchase order funding are becoming increasingly important.
By connecting businesses with specialised funding providers, the FNB-Sourcefin partnership seeks to remove financial barriers that prevent entrepreneurs from capitalising on growth opportunities.
For many SMEs, access to working capital at the right moment could mean the difference between missing an opportunity and building a stronger, more sustainable business.
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