In Part 1 of the ProfitShare Partners Mythbusters series, we looked at three common assumptions about purchase order funding. These included the belief that funding can save any business, that funders take a stake in the company, and that one funded project leaves the business on its own afterwards.
In Part 2, we focus on three more beliefs that can make SMEs hesitate before applying for funding, even when they have a real opportunity in front of them.
For many small businesses, caution is understandable. Taking on funding is a serious decision. The problem is not caution itself, but misunderstanding what the right funding is designed to do.
Here are the next three funding myths worth rethinking.
Myth 4: I could lose my business if I take on funding
Many business owners worry that external funding will put their company at risk. That fear is not irrational. Poorly structured purchase order funding can create pressure, especially if repayment terms do not match the business’s cash flow or if the funding is used without a clear plan.
But responsible funding should not be built around pushing a business into a position it cannot manage.
The right purchase order funding structure starts with the opportunity itself, including the buyer, supplier, delivery plan, margins, and expected payment flow. It asks whether the business can realistically deliver the work and whether the funding supports that delivery.
Purchase order funding should not be about taking unnecessary risks. It should help a business execute confirmed work in a way that protects operations rather than weakens them. When funding is structured properly, it should support growth rather than place unnecessary pressure on the business.
Myth 5: Alternative funders only care about getting their money back
Any funder needs to manage risk. That is simply how funding works. But there is a difference between funding that only focuses on repayment and funding that considers whether the business can grow sustainably through the transaction.
A funding partner should understand the deal, timing, supplier requirements, and pressure points that could affect delivery. The goal should be to structure funding to give the business a better chance of completing the work, protecting the customer relationship, and building a stronger track record.
That does not mean every application will be approved. It does mean that the assessment should be grounded in the business opportunity, not only in a narrow view of risk.
The right funding partner is not there only to recover capital. It should help ensure the funding makes commercial sense for the business as well.
Myth 6: You need years in business before you can qualify for funding
A long trading history can help any business funding application. It gives funders more information to assess, and it can show a pattern of delivery.
Many SMEs are still building their track records as meaningful opportunities arise. They may not have years of financial history. Still, they may have a confirmed order, a credible buyer, reliable suppliers, workable margins, and the ability to deliver if the right capital is available.
That is why purchase-order-linked funding looks at the strength of the purchase order as well as the business behind it. This does not mean funding is automatic. It still needs to be assessed properly. But it does mean that access to purchase order funding does not depend solely on how long the business has existed.
At ProfitShare Partners, funding is structured around confirmed purchase orders and contracts. The aim is to help businesses access capital when there is work to deliver, while making sure the deal is assessed responsibly.
If your business has secured a real opportunity but you are unsure whether your experience, structure, or track record is enough, it may be worth exploring whether transaction-linked funding is suited to the deal in front of you.
In Part 3, we will unpack three more funding assumptions that often hold SMEs back, including what deal size qualifies and how simple the application process can be.
