RM Capital Maps the Purchase Order Funding Process for Year-End Orders

JOHANNESBURG, October 2026. RM Capital, the Melrose Arch based niche funder, is setting out exactly what happens between the moment a supplier receives a purchase order and the moment the goods reach the customer. With the final quarter of the year under way, many South African suppliers are being asked to deliver stock before the December slowdown, and the firm wants business owners to understand the sequence of a funded deal before the paperwork lands on their desk.

October is often when the size of an order runs ahead of the cash in the bank. A distributor of finished goods may win a contract from a corporate buyer or a government department, but still has to pay its own supplier before it can invoice anyone. That gap is the problem RM Capital was set up to solve, and the firm believes that a clear view of the process removes much of the hesitation owners feel about outside funding.

What purchase order funding does

Purchase Order Funding, which RM Capital also describes as tender order funding, allows a business to pay its supplier for goods that it intends to resell or distribute to a customer who has issued a written purchase order. The supplier is paid up front to manufacture or deliver the goods, and the business settles the funding once its own customer pays. RM Capital finances up to 100% of the purchase order costs.

The firm structures most of these deals as an invoice factoring transaction. Factoring is not a loan. RM Capital purchases the rights to the payment that will be received from the customer, and then pays the supplier directly or provides payment guarantees. For a growing company, that means it can accept larger orders without taking on bank debt or selling equity in the business.

The process, one step at a time

RM Capital publishes a straightforward sequence on its website, and the firm is drawing attention to it this month for businesses with year-end orders in hand.

First, the business sends RM Capital a copy of the purchase order or a signed appointment letter, together with the supplier agreement, a pro forma supplier invoice or a quotation. These documents show what has been ordered, by whom, and what it will cost to fulfil.

Second, RM Capital asks for certain information about the business so that it can review the transaction. The review looks at the main aspects of the deal, including the supplier, to confirm that it has the reputation and capability to deliver the products that have been ordered.

Third, once all the necessary information and documents are in place, RM Capital notifies the business that the purchase order transaction has been approved and confirms any other securities that are needed.

Fourth, a factoring agreement and a guarantee agreement are sent for signature, and the funds are paid to the supplier. The goods can then be produced or shipped and delivered to the end customer.

Finally, when the customer pays the invoice for the purchase order, that payment is used to settle the purchase order funding. The business receives the difference once the funding and the funding costs have been paid.

Who the facility is built for

The facility is aimed at entrepreneurs and growth businesses that sell finished goods, raw materials or components, either business to business or to government departments. Goods must be on a supply and delivery basis, with delivery included by the supplier or outsourced to a reputable third party. RM Capital does not fund construction, cleaning or security services under this product, and it looks for profit margins of over 20%.

A critical part of every decision is the credit worthiness of the customer who placed the order. The funding rests on that customer's ability to pay on time, which is why a sound purchase order from a reliable buyer carries so much weight. For many smaller suppliers, this is a different conversation from the one they have with a bank, where the focus tends to fall on the borrower's own balance sheet and fixed assets.

Business owners comparing Purchase Order Funding Companies often want to know whether the funder will stay with them as the business grows. RM Capital points to a deal described on its own website. The firm funded a medium sized, woman owned BEE company so that it could fulfil purchase orders from a government department in the Western Cape. The first funding provided was R850,000. As the company grew and its order commitments increased, RM Capital continued to fund it, and over 18 months it funded more than R5,000,000 to the business, supporting the supply of essential products to the Western Cape Government.

Why the timing matters in October

The last three months of the calendar year bring a particular kind of pressure. Buyers want stock in place before offices and factories close for the festive break, while suppliers want their own payment before they release goods. A business caught between the two can lose an order simply because it cannot pay for the stock in time.

Purchase Order financing is designed for exactly that squeeze. Because the funding is tied to a specific order and a specific customer, it can be put in place for the deal at hand rather than as a broad credit line. RM Capital also notes that it offers funding approval in time scales that make commercial sense, with confidentiality and minimal paperwork, and that clients deal with the decision makers directly.

A wider set of working capital options

Purchase order funding sits within a broader range of short to medium term facilities. RM Capital offers invoice discounting and factoring, where unpaid invoices are used as an asset to raise cash flow, either by factoring a book of debts or by discounting a single invoice. It provides accounts factoring for advocates of the South African Bar and other professionals such as doctors, accountants, engineers and architects, where funding can be approved within 24 hours.

The firm also designs cash flow funding structures for businesses facing short term constraints, built around expected future cash flow rather than tying up core assets that the business still needs for rent, payroll and daily expenses. For companies that struggle to secure funding from mainstream banks, RM Capital offers structured finance, including working capital, cash flow and revolving credit facilities shaped around the client's circumstances.

Practical preparation for suppliers

For businesses expecting orders between now and December, RM Capital suggests having the core documents ready before a deal arrives: the customer's purchase order or appointment letter, a supplier quotation or pro forma invoice, and the basic company information the review requires. Having these on hand shortens the path from order to approval and gives the supplier confidence that payment will follow.

Owners who want to read the full qualifying criteria, see the step by step process or apply can learn more at https://www.rmcapital.co.za/.

About RM Capital

RM Capital is a niche funder based at Melrose Arch, Illovo, Johannesburg. The firm specialises in purchase order funding, accounts receivable factoring, invoice discounting, bridging and structured finance, and designs short to medium term funding solutions for growth companies. Its clients are typically businesses that cannot arrange bank financing in the short term but have the foundation in place for long term success. Funding can be used for cash flow, working capital or as a financial bridge based on specific exit events.

Media Contact
RM Capital
Email: info@rmcapital.co.za
Phone: +27 11 447 7596
Website: https://www.rmcapital.co.za/