Business funding is often misunderstood. In this four-part ProfitShare Partners Mythbusters series, we unpack common beliefs that can prevent SMEs from using funding effectively. Each article looks at 3 myths and explains what business owners should know before deciding whether purchase order funding is right for their next opportunity.
In this first article, we look at three assumptions that often come up: that purchase order funding will always save a business, that funders will take a stake in the company, and that once one project is funded, the business is on its own.
Those beliefs can prevent growing businesses from using purchase order funding properly, especially when it could help them deliver confirmed work, protect cash flow, and build a stronger track record.
Here are the first three funding myths worth rethinking.
Myth 1: Purchase Order funding will always save my business
Purchase order funding can support growth, but it is not a magic fix for every business challenge. Used at the wrong time or for the wrong reason, it can add pressure rather than solve it.
The strongest use case is usually not a business already in deep trouble. It is a business with a real opportunity in front of it, such as a confirmed order, contract, or project, but not enough working capital to deliver without putting strain on cash flow.
When funding is linked to a clear commercial opportunity, it can help a business buy stock, pay suppliers, mobilise resources, or keep operations moving while waiting for customer payment. It becomes a growth mechanism, not a last-minute lifeline.
The question is not only whether funding is available but also whether it is structured around something the business can realistically deliver.
Myth 2: Funders will take a stake in my business
Many entrepreneurs are cautious about external funding because they fear losing ownership or control. That concern is understandable. Small business owners build their businesses through years of work, risk, and personal sacrifice. Handing over equity is not a small decision.
But not all funding works that way. Some funding models are built around the transaction, not ownership of the business. For example, purchase-order-linked funding can be structured around a specific confirmed purchase order. The funder assesses the order, the buyer, the supplier, the margins, and the delivery plan. The business uses the funding to execute the work, without giving away a stake in the company.
That is an important distinction for SMEs that are growing but still need to protect control. The right funding should help a business deliver without requiring the owner to give up equity or control.
Myth 3: You get funding for one project, then you are on your own
One funded deal should not be seen as the end of the road. In many cases, one successful delivery creates the conditions for the next opportunity. A business proves it can perform, builds buyer confidence, strengthens its supplier relationships, and creates a track record that makes future funding conversations easier.
Growth rarely happens through one isolated transaction. It often happens through a series of deals, each one building credibility for the next.
That is why purchase order funding should be viewed as part of a business growth plan, not a once-off rescue exercise. If a business secures another qualifying order or contract, it may be able to return for funding again.
The point is not to create dependence on external capital but to use the right funding at the right moment so that growth does not stall between opportunity and delivery.
At ProfitShare Partners, funding is structured around real business opportunities and confirmed transactions. For SMEs that have secured work but need capital to deliver, the right funding can help them move with more confidence.
If your business has a confirmed purchase order or contract and needs working capital to execute it, it may be worth exploring whether transaction-linked funding fits the next step in your growth plan.
In Part 2, we will unpack three more funding assumptions that often hold SMEs back, from repayment concerns to what really matters when a funder assesses an opportunity.
