Can I get funding before I win the tender?

Generally not for the contract itself, since most contract finance is advanced against a signed order. You can arrange a facility in principle beforehand, which is worth doing if you are bidding for work larger than you have delivered before.

How long does government take to pay?

Around thirty days from a correct invoice is the norm, and in practice longer when documentation is queried. Build the wait into your pricing rather than assuming best case.

tender funding south africa

Funding a tender you have won

Winning is not the hard part if you cannot fund delivery. What funders look for.

5 min read

A won tender can sink a business that cannot fund delivery. Public sector invoices are commonly settled around thirty days from a correct invoice, and longer when documentation queries arise, while your wages and suppliers do not wait.

This covers the funding routes and what a funder will ask for.

The working capital gap

The gap is between your outflows starting and the first payment landing. On a labour contract that is wages from week one against payment perhaps ten weeks later. On a supply contract it is stock purchased up front against payment after delivery and invoice approval.

Model the gap before you bid, not after you win. It belongs in your pricing as a cost of capital, not in your overdraft as a surprise.

Common routes

Which one fits depends on whether your cost is stock or people.

Purchase order or contract finance, advanced against a signed order from a creditworthy buyer
Invoice discounting, which advances against invoices already raised
Development finance institutions and provincial agencies, which often lend to smaller suppliers on better terms than commercial lenders
Trade credit from your own suppliers, which is frequently the cheapest and most overlooked option

What a funder will ask for

Expect the signed contract or purchase order, your costing for the contract, evidence you can deliver it, and your compliance pack. The buyer's creditworthiness matters as much as yours, which is why government contracts are often fundable even for young businesses.

Have the costing ready in a form someone else can follow. A funder declining because they could not follow your numbers is a common and avoidable outcome.

Common questions

Can I get funding before I win the tender?: Generally not for the contract itself, since most contract finance is advanced against a signed order. You can arrange a facility in principle beforehand, which is worth doing if you are bidding for work larger than you have delivered before.
How long does government take to pay?: Around thirty days from a correct invoice is the norm, and in practice longer when documentation is queried. Build the wait into your pricing rather than assuming best case.