The practical starting point for business finance is your funding gap: the amount of cash missing when an expense must be paid. Calculate it using the timing of payments and receipts. Sales, profit and the balance in your bank account answer different questions. The business funding definition guide explains those terms; this page shows how to calculate the timing and amount of your cash gap.
Draw the cash timeline
List each expected outflow and inflow by date. Begin with cash already available, then add supplier deposits, stock purchases, payroll and other commitments. Add customer receipts on realistic dates. The lowest projected balance helps identify the peak cash need.
Do not count the same money twice. A customer deposit already used to buy materials is not still available for payroll. An invoice that has been issued is not the same as a payment received.
An illustrative order cycle
- A customer confirms an order.
- The supplier requires payment before releasing goods.
- Your business arranges transport and completes delivery.
- The buyer accepts the delivery and the invoice becomes payable under the agreement.
- The buyer pays, allowing the transaction to be reconciled.
The cash gap may begin at step two and continue until step five. Actual transactions differ, so use your written supplier and buyer terms instead of assuming standard dates.
Choose finance for the stage you are in
If your lowest cash balance occurs before delivery because a supplier needs payment on an awarded government or municipal order, start with Fund The People’s own Purchase Order Funding Solutions in South Africa. If the work is already delivered and accepted but an eligible government invoice remains unpaid, use our own Invoice Discounting Solutions. Mark that stage on your cash timeline so our team can assess the actual transaction and the date the gap arises.
Longer-term needs, such as buying equipment, have a different repayment horizon. Compare the expected benefit and useful life of the investment with the facility’s terms.
Compare total cost rather than one percentage
Ask what amount you will receive, which charges apply, when they are charged and what must ultimately be settled. Understand how cost changes if payment takes longer. Compare offers using the same amount and timing assumptions.
Review security, cession and surety provisions separately. A short application or a quick initial response does not tell you the full obligations of the agreement.
Keep a margin for uncertainty
Prepare a second forecast with slower receipts or higher delivery costs. This is a planning exercise, not a prediction. It helps you see whether the business can absorb a delay and which questions to resolve before accepting the order or finance.
Fund The People’s order-focused approach makes the enquiry practical: show the amount missing at the supplier-payment date, rather than treating the full selling price as the amount required. Our own Purchase Order Funding Solutions offer R250,000–R8,000,000+ for qualifying deals, with funding approval within 48 hours for complete qualifying applications. Use the funding requirements checklist, then apply to Fund The People with the award, current quotation and dated funding gap. Ask which costs are covered and compare the written charges with your remaining margin before accepting.