The unofficial theme for the 2026 SME Funding Summit was funding readiness. During the event, which was held in June, many speakers emphasised that the key to unlocking funding is business funding readiness. It’s therefore no surprise that Ruan Fourie, CEO of AAA Consortium, centred his presentation around this topic.
“I don’t like the word funder,” he admits in his opening remarks. “We believe in partnering with your business.” His reasoning is simple: Since they specialise in purchase order funding, their priority is to partner with you – regardless of what your business does – and help you deliver on the purchase order (PO). “We put our entire team of 34 staff members behind you, helping you chase payments and succeed,” he adds.
Funding Readiness for Purchase Order Funding
SMMEs are not struggling because they lack ambition. The system is often difficult, competitive and unforgiving
He explains that three factors truly matter in the business if you want to move away from ‘struggling’ towards ‘success’.
- Tax compliance,
- who you sell to, and
- your margins.
1. Tax Compliance
Compliance is a daily task, not a box to tick once a year. “If SARS isn’t satisfied with your business, you are out of business. When your clients know you are uncompliant, and they stop paying and conducting business with you,” Fourie states. “Most of the deals that we reject are because the company is non-compliant.
“From day one, educate yourself on tax and find yourself a good accountant to help you, because this is a costly mistake,” Fourie alludes to the hundreds of thousands of rands that quickly add up on penalties and arrears if you don’t remain tax compliant.
The benefits of being compliant are simple:
- Faster approvals
- Greater trust
- More opportunities
- Reduced delays
A non-compliant business often sees:
- Delays
- Increased scrutiny
- Lost opportunities
- Funding challenges
2. Who You Sell To
Understanding who your client is can make or break a deal. Using the example of a business that has either a reputation for not paying suppliers or long payment terms, doing business with such an entity severely affects your bottom line. “One bad client not paying can ruin your entire business. You might end up owing investors just because a client didn’t pay you for the work delivered.
Fourie explains that as a business owner, you need to understand the following:
- Not every PO is fundable.
- Not every client pays on time.
- Delayed payments create risk.
- Funders assess the buyer, not the supplier.
These are all elements that the funding partner takes into account when deciding whether or not they are going to invest in your project. “You can have the biggest PO, but if it is from a department or client that we know doesn’t pay, then it’s a risk we don’t want to take on.”
So what makes a good client? Here are some clues:
- Strong payment history
- Responsive communication
- Repeat business
- Credible organisation
Fourie’s advice is to stop chasing purchase orders. Instead, SMMEs need to chase the right PO. This will ensure that a funding partner is willing to commit, and that your business doesn’t take on unnecessary risk.
3. Margins
Margins can easily be misunderstood. The term ‘revenue’ is frequently used as a synonym for profit, which it is not.
Your revenue is the total amount of money that your business brings in. Essentially, it is a synonym for gross income: the money generated from sales, rent or interest that totals the complete inflow of money before any expenses or taxes are subtracted.
To understand your true profit on a purchase order, you will calculate it by using your revenue and subtracting the funding costs, taxes and additional expenses like admin or logistics costs. This will give you the actual view of your profit.
REVENUE – (FUNDING COSTS + TAX + OTHER COSTS) = PROFIT
Fourie notes that this is only one side of understanding your margins. “It doesn’t matter in which industry you are in, you have to do your due diligence. This means that you have to be at the briefing and that you need to price correctly. If you price wrong and you are unable to deliver, then you might be blocked for life.”
Pricing correctly entails forecasting what elements your business may be lacking that you will need to obtain once you receive the project. This could be labour, a security system, or even equipment.
Entrepreneurs who are actively seeking out POs to deliver need to think a few steps ahead. “You have to get into the space where you can say that ‘I am fit, I am ready, and I already signed up with a funder for when I get the deal’ so you can go to the funder on the same day, who can then start their due diligence,” he says. “That’s the only way you can get ahead.”
Funding Partners That Aim At Growth
Fourie explains that SME funders are usually there for businesses who might not be ready for the funding instruments from traditional lenders that don’t fit them yet.
AAA Consortium is there to help a business deliver on a service. They don’t look at the same aspects that a traditional lender might, such as your personal credit score history, simply because it isn’t relevant to the deal. “We only look at the factors that we mentioned about tax compliance, who the client is and what the margins on your deal are,” he shares.
An important point that Fourie also makes is that the long-term goal for a small business is to grow to a point where the banks’ funding instruments are a better fit for their needs. This is exactly why he believes that non-traditional lenders are funding partners. “We are there to help you grow through the bidding process and deliver on your deal with purchase order funding or invoice discounting,” he emphasises.
“Every participant – exhibitor or sponsor – is here to help you through your journey and grow your business,” he concludes.
The unofficial theme for the 2026 SME Funding Summit was funding readiness. During the event, which was held in June, many speakers emphasised that the… Read More
