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Government Invoice Discounting

Government Purchase Order Finance is a financing option in which Suppliers, that lack cash flow, secure the necessary capital to fulfil large purchase orders from Government entities. The Applicant/ Supplier will use the purchase order as collateral to obtain funds to cover the materials, labour, and other expenses needed to complete the order from Government. This type of funding helps Suppliers meet Government contract obligations without financial strain, allowing them to maintain operations and grow without the delays that can come from traditional financing methods.

Government Invoice Discounting unlocks your business cash flow dynamics. When you provide products or render services to Government entities, you will generally need to wait for payment. Our solution allows you to borrow against Government invoices that you are awaiting payment on. Our specialised Lenders evaluate the invoices and offer you an immediate cash advance based on the invoice amount and the date it is due for payment. This helps businesses manage operations and trade more efficiently without waiting for long Government payment cycles.

The Process

  1. The Supplier has already completed work in relation to a Purchase order or Tender.
  2. The Supplier has issued an invoice for the completed work.
  3. The Supplier offers to cede the invoice to the Lender.
  4. The Lender conducts a due diligence on invoices and prepares necessary paperwork
  5. The Lender agrees to advance up to 75% of the value of the invoice to the Supplier.
  6. The Land the Supplier wait for payment for the Government department to pay the invoice.
  7. When the invoice is paid to the Lender , the Lender deducts its loan amount, the interest and charges and pays the Supplier the balance

The Lender charges interest rate for Government Invoice Discounting transactions which varies based on the loan amount, the Government entity and any other relevant risks to the transaction.

The Lender carefully considers the unique merits of each transaction, but the following minimum requirements will take preference:

  • Your Invoice must be more than R400 000.00
  • Your invoice must be approved for payment.
  • Your Invoice must be payable within 60 days