By Louis du Plessis
CEO Pollen Finance | Sept 12, 2026 | 4 min read
Manufacturers use working capital funding to cover the upfront costs of fulfilling large orders before customer payments arrive. Funding may be used for raw materials, labour, packaging, supplier costs, transport and other production expenses. The strongest funding case usually exists when the order is confirmed, the margins are understood and the business has capacity to deliver.
Winning a large order should be good news. Usually it is, but in manufacturing, a large order can create an immediate problem.
You may need raw materials, more staff hours, packaging, transport, or additional production capacity. All before the customer pays you. That means a business can have more work than ever and still experience cash flow pressure.
It is one of the clearest examples of why growth and cash flow are not the same thing.
A manufacturer often carries the cost of production before earning the related revenue.
The cycle may include:
If the customer pays 30 or 60 days later, the manufacturer may fund several months of activity before cash returns. The larger the order, the greater the working capital requirement.
This is something many business owners only discover once growth accelerates. Sales and revenue increase, but so does the amount of money required to operate.
More orders can mean more raw materials, higher wages, and more transport. Growth creates cash requirements before it creates cash.
Manufacturers may use working capital to finance:
It can help bridge the period between starting production and receiving customer payment.
Some businesses may have access to funding linked specifically to a confirmed purchase order. Others use a broader working capital facility. The distinction matters.
Purchase order funding is typically connected to a specific customer order. Working capital may provide more flexibility across several operating costs or orders. The most suitable structure depends on the order, production cycle, and business cash flow.
A large order is not automatically a good order.
Before taking on funding, some of the things the manufacturer should understand includes:
Funding an unprofitable order simply creates a larger problem. Volume is not the same as value.
Cash is not the only constraint. A manufacturer also needs to know whether the business can actually deliver.
If equipment is the constraint rather than working capital, Equipment Finance for Growing Manufacturers may be the more relevant solution.
Strong supplier relationships can have a major impact on working capital. Manufacturers may be able to negotiate longer payment terms, bulk pricing, or deposits rather than full upfront payments.
Every additional day between receiving materials and paying for them improves the cash conversion cycle.
When assessing funding for a manufacturing order, funders may consider:
The key question is whether the order creates a realistic path to repayment.
A big order may require more working capital than expected.
Large turnover can hide poor margins.
A 60-day payment term changes the funding requirement considerably.
The order only creates value if it can be fulfilled successfully.
One large customer should not leave the rest of the business unable to operate.
There are few things more frustrating than having demand you cannot afford to fulfil. That is exactly the kind of situation where working capital can become useful.
Not to create demand or to fix a weak business, but to help an established manufacturer act on an opportunity that already exists. Because sometimes the biggest challenge in growth is not finding the next customer. It is having the financial capacity to say yes when they arrive.
About the author
Louis du Plessis is the CEO of Pollen Finance, helping established South African businesses access funding to seize growth opportunities. He writes about business funding, cash flow and entrepreneurship, drawing on over a decade of experience working alongside SMEs.
