Through a referral arrangement, FNB has expanded the options available to business clients who have secured confirmed purchase orders or contracts but need money upfront to deliver on them.
Many businesses face a familiar challenge: they receive a confirmed purchase order or contract, but need cash upfront to buy materials, pay suppliers, or deliver goods or services before they get paid.
This cash‑flow gap can prevent otherwise capable businesses from taking on opportunities and growing. To help address this, FNB can now refer eligible business clients to Sourcefin for consideration for purchase order (PO) financing.
Sourcefin reports that it has deployed R3billion[i] to more than 1,000 SMEs across South Africa in just five years of operation. With long-term business growth top of mind, Sourcefin also reports that it connects funded businesses to a network of more than 2,000 pre-vetted suppliers worldwide and partners with SMEs along their business journey to support delivery outcomes.
In terms of the referral arrangement, FNB can refer SMEs seeking PO or tender-based finance directly to Sourcefin, so that qualifying entrepreneurs who have secured work but need the upfront capital to deliver can apply to Sourcefin for funding.
In simple terms, this allows a business to be considered for funding based on a confirmed purchase order or contract, so it can complete delivery before receiving payment from client.
As a complementary solution to traditional business lending, this type of funding is linked to work that has already been secured.
What this looks like in practice is simple: clients can speak to their relationship manager or business banker, who can facilitate a referral to Sourcefin. SMEs referred to Sourcefin through the referral arrangement with FNB may be considered by Sourcefin for funding based on Sourcefin’s own assessment.
Upon receiving the referral, Sourcefin validates the purchase order, vets the parties involved and independently assesses the application. Sourcefin also performs its own fraud checks as part of its assessment.
Sourcefin specialises in funding procurement-linked transactions and reports a strong track record on funded deals to date. Sourcefin works with SMEs to support them through delivery.
Clients can initiate a referral through their FNB relationship manager or business banker. All assessments and decisions to offer purchase order financing are made solely by Sourcefin, in line with its own credit and risk processes. FNB does not assess, approve, or fund applications and a referral does not guarantee that funding will be offered by Sourcefin.
Gavin Tarr, Head of Working Capital Solutions, FNB Commercial Structured Finance Solutions, says, “Many businesses are doing the right things — securing customers and confirmed orders, but struggle with cash flow at the point they need to deliver. By enabling access to purchase order financing through this referral arrangement, we are helping SMEs unlock cash flow when it is most needed.”
“Sourcefin exists to enable SMEs,” adds Joshua Kadish, CEO and co-founder of Sourcefin. “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.”
What this looks like in practice:
For example, an SME receives a confirmed purchase order to supply desks to a school. While the order is secured, the business needs money upfront to procure the desks and arrange delivery. Payment will only be made once delivery has taken place.
In this situation, purchase order financing can enable the business to apply for funding against the confirmed purchase order so delivery can go ahead. Through FNB, the business is referred to Sourcefin for assessment, helping it fulfil the order rather than turning away the opportunity or seeking funding outside its bank.
This referral arrangement is available to established FNB business clients, particularly SMEs, delivering against confirmed purchase orders across both private and public sector supply chains.
Importantly, this does not replace FNB’s existing business loans or trade finance solutions. Instead, it fills a specific gap for SMEs that have secured confirmed purchase orders but need funding upfront to deliver them.
FNB engages with clients through its relationship managers and business bankers, who can facilitate access and referrals for clients who want to learn more.
Clients can also visit www.fnb.co.za for additional information.
