A contractor pays for materials, labour and plant before the client pays for the work. Then the client, often a government department or a main contractor, may pay late. The funding that tends to fit a contractor is tied to the job: the tender you've won, the order you've been given, or the invoice you're waiting on. In our view, a card-split merchant cash advance (MCA) rarely fits, because contractors are usually paid by EFT against invoices, not by card.
How late government pays
National Treasury publishes how many supplier invoices national government departments paid later than 30 days. In October to December 2025 (Q3 of the 2025/26 financial year), national departments paid 19,689 invoices, worth R978,814,675, after 30 days. At the end of December 2025, a further 2,147 invoices, worth R319,425,493, were older than 30 days and still unpaid. These figures are for national departments only.
If you work for government, plan as if you'll be paid late, and fund the gap rather than hope it won't come.
Which funding tends to fit, and why
| Funding type | Tends to fit when... | Why it suits contractors |
|---|---|---|
| Tender funding | You have been awarded a tender | Pays suppliers, materials, stock and other project costs, repaid from the project proceeds. The funder will usually want the award letter or contract. |
| Purchase order funding | A client has issued a confirmed purchase order | Pays the supplier costs to deliver that order, settled once the client pays. |
| Invoice discounting | You've invoiced for completed work and are waiting to be paid | Advances part of the invoice value before the client pays. Settled when the client pays. The cost depends on the debtor, invoice value, payment terms and transaction. |
| Asset finance | You need a bakkie, a truck, a TLB or other plant | Repaid monthly over an agreed term. Match the term to how long the machine will last. |
| Working capital | Several costs at once, not tied to one job | General funding. Usually repaid in fixed instalments. |
Tender and purchase order funding costs depend on the transaction. The funder confirms the cost.
Guarantees are a separate thing
A tender may ask for a bid bond when you bid, and a performance guarantee once you win. Both are promises to the client, issued by a bank or an insurer. A bank's own guide says a bid bond "Compensates the employer if you are awarded the contract but do not take it up", and a performance guarantee "Compensates the employer if you do not perform according to the contractual terms" (the employer is the client). Neither gives you cash to do the work. That is what tender or purchase order funding is for, and you may need both.
Guarantees aren't one of the six funding types we help with. If a tender asks for one, speak to your bank or an insurer that issues them, and do it early, before the tender closes.
Before you take on a big job
- Work out what you must pay out before the first payment comes in: materials, labour, plant hire, guarantees.
- Check the payment terms in the contract, and plan for late payment.
- Line up the funding before you start, not halfway through the job.
- Ask for the total cost in rand, and check the job's margin can carry it.
What we look for
We work with retailers, hospitality operators, contractors and transport businesses. We can help registered Pty Ltd companies and close corporations (CCs) that have traded for at least 12 months and need from R50,000. For tender or purchase order funding, have the award letter, contract or purchase order ready.
Next step
Check your fit. It takes about 2 to 3 minutes and needs no documents to start.
Sources
- treasury.gov.za: Table 1, Quarter 3 FY2025/26, "National Departments 19 689 R 978 814 675 2 147 R 319 425 493
- online.firstrand.co.za: bid bond "Compensates the employer if you are awarded the contract but do not take it up so the employer can rerun the tender process
- guardrisk.co.za: lists "Construction guarantees" including "Bid bond/guarantee" and "Performance bond/guarantee