01
The awarded contract
Whether the tender or contract is valid, awarded and sufficiently clear about scope, value and delivery.
Tender funding
Fund an awarded tender without carrying the full delivery cost yourself.
Estimate the upfront funding gap between contract delivery costs and the cash already available to your business.
Looking for purchase order funding?Estimate your tender funding gap
Estimated initial funding gap
R550 000
Indicative margin before finance: R350 000
Simplified pre-payment gap; actual peak funding needs depend on cost and receipt dates, taxes, fees and contingency. This is an indicative estimate, not a funding offer or approval.
What it can finance
Finance the costs required to move from award to delivery.
The funding requirement should come from the economics of the transaction. Different contracts create different combinations of mobilisation, procurement, labour and fulfilment costs.
01
Mobilisation
Upfront costs required to move from an awarded contract into execution.
02
Suppliers
Goods, materials and supplier payments required to fulfil the contract.
03
Labour
Project labour, temporary teams and other people costs tied to delivery.
04
Logistics
Transport, distribution and movement of goods required for fulfilment.
05
Equipment
Equipment or productive resources needed specifically for execution.
06
Fulfilment
Other direct costs that must be carried before the customer settles.
How tender funding works
Follow the cash through the transaction.
The important question is not simply how large the tender is. It is when cash must leave the business, when cash comes back and how large the deficit becomes in between.
01
Awarded tender
02
Cost delivery
03
Determine funding gap
04
Finance execution
05
Deliver
06
Customer pays
07
Repay facility
The funding gap
A R1 million tender does not automatically require R1 million of funding.
Contract value describes what the customer will ultimately pay. Funding requirement describes the capital the business needs to survive the execution cycle before that payment arrives.
Contract / PO value
R1 000 000
Supplier costs
R25 000
Labour costs
R110 000
Logistics costs
R60 000
Peak funding requirement
Illustrative transaction
R204 750
Illustrative example only. Actual funding requirements depend on the transaction structure, timing, deposits, supplier terms, contribution and other execution costs.
Funding assessment
What a funder may want to understand.
Tender funding is ultimately a transaction assessment. A funder needs enough evidence to understand the contract, execution risk, economics and route to repayment.
02
The customer
Who ultimately pays the contract and the expected reliability and timing of settlement.
03
Transaction economics
Whether the contract retains sufficient margin after fulfilment costs and the cost of finance.
04
Execution capability
Whether the business can realistically mobilise, procure, deliver and complete the contracted work.
05
Funding requirement
How much external capital is actually required and when the cash deficit reaches its peak.
06
Repayment source
How the facility is expected to be repaid once the customer settles the contract.
Compare capital routes
Tender funding, PO funding and working capital solve different problems.
Tender funding
Purchase order funding
Working capital
Primary purpose
Execute an awarded tender or contract.
Procure goods required to fulfil a confirmed order.
Support ongoing operating liquidity.
Typical trigger
Awarded tender or signed contract.
Confirmed purchase order.
Recurring cash-flow or operating gap.
Funding logic
Based on the cost and timing of executing the contract.
Closely linked to supplier procurement and order fulfilment.
Linked to the broader operating cycle of the business.
Prepare the evidence
What you may need before approaching a funder.
Requirements vary between institutions, but a funder will typically need enough information to validate the transaction and understand how it will be executed.
Award letter or signed contract
01
Tender or project scope
02
Supplier quotations
03
Execution budget
04
Delivery or implementation plan
05
Business registration documents
06
Recent bank statements
07
Financial statements or management accounts
08
Tax and relevant compliance documents
09
Capital Discovery
Don't start with a lender. Start with the transaction.
FNDER helps you understand the funding requirement first, then compare your business position against relevant capital mandates.
Discover capital matchesTender funding FAQ
Questions businesses ask before seeking funding.
01
What is tender funding?
Tender funding is capital used to help a business execute an awarded tender or contract. It can be used for eligible fulfilment costs such as suppliers, labour, mobilisation and logistics before the customer pays.
02
Do I need an awarded tender before applying for tender funding?
Tender finance is generally associated with an awarded or contracted transaction because the contract helps establish the value, scope, customer and expected repayment event. Individual funders may apply different eligibility requirements.
03
Can tender funding cover the full value of a tender?
The contract value and the funding requirement are not the same thing. The appropriate facility depends on the costs that must be funded, available deposits, supplier terms, the business's own contribution and the timing of cash inflows and outflows.
04
What is the difference between tender funding and purchase order funding?
Tender funding generally supports execution of a broader awarded contract, while purchase order funding is typically centred on financing the procurement and fulfilment of goods against a confirmed purchase order.
05
How is the tender funding requirement calculated?
A useful starting point is to model the transaction cash flow. Fulfilment costs, deposits, supplier payment terms, customer payment timing and the business's own contribution determine the maximum cash deficit, or peak funding requirement.
06
What do tender funders assess?
Assessment can vary by funder, but may include the awarded contract, customer, transaction economics, fulfilment capability, supplier quotations, business track record, funding requirement and expected repayment source.