Winning a corporate contract is supposed to be the good news. You have beaten the competition, the purchase order is signed, and your business is now supplying a hospital, a manufacturer, or a county government. Then the reality of the payment terms lands: you deliver first, invoice second, and get paid 60 or 90 days later. Meanwhile your own suppliers want payment on delivery, your staff want paying at month end, and the next tender is already open.
This is one of the most common traps in Kenyan business. It is not a profitability problem. On paper the contract is good and the margin is real. It is a timing problem, and timing problems have their own solutions. Two of them are invoice discounting and LPO financing, and though they are often mentioned together, they solve opposite ends of the same cycle.
Invoice discounting works after you have delivered. You have supplied the goods or completed the service, you have issued an invoice to a creditworthy buyer, and now you are waiting. Rather than waiting out the full payment term, the invoice is discounted and a portion of its face value is released to you immediately. At Tip-Point Capital that is typically up to 70% of a verified invoice, on cycles of 30, 60 or 90 days aligned to the buyer's own payment terms. The cash tied up in that receivable becomes available now, and the facility settles when your client pays.
LPO or contract financing works before you have delivered. You hold a validated Local Purchase Order or supply contract but lack the capital to buy the stock or materials needed to fulfil it. Financing is advanced against that order so procurement can begin immediately, and the facility is repaid once the contract is completed and paid. The distinction matters: one unlocks money you have already earned, the other funds work you have been contracted to do but cannot yet start.
Not every invoice or order qualifies, and the reason is straightforward. In both cases the strength of the facility rests on the buyer, not only on you. Invoices and orders issued to vetted corporates, multinationals, government agencies, healthcare facilities and established private enterprises are the ones that work, because their payment behaviour is predictable. An invoice to a client who has gone quiet for four months is not a financing candidate. It is a collections problem, and financing will not solve it.
There is one condition worth understanding clearly before you sign. If your client delays paying a discounted invoice, recourse ultimately rests with you as the primary borrower. A good lender will engage the debtor alongside you, but the obligation does not disappear simply because your client is slow. That is precisely why buyer quality is assessed so carefully at the outset, and why it is worth being honest with yourself about which of your clients genuinely pay on time.
Used well, these facilities change what your business can bid for. A supplier who can only take on contracts small enough to self-fund is competing in a very different market from one who can convert a signed LPO into stock within days. If you are turning down tenders because the payment terms would strain your cash flow, or watching working capital sit idle in unpaid invoices, that is the gap this product exists to close. Talk to our trade desk about what your receivables and order book could unlock.
