Black industrialisation needs a financing floor, not a ceiling

Most people think the hard part is getting the contract.

It's not.

The hard part is what happens next: finding stock, paying suppliers, moving product, meeting specifications, covering labour, keeping quality consistent, delivering on time, and then waiting 30, 60, sometimes 90 days to get paid.

That's the real pressure zone.

And when liquidity isn't structured into the system, SMEs end up doing something that looks like 'hustle'… but is actually just instability. They're forced to compress timelines, cut corners, overpromise, under-resource, and take shortcuts just to stay alive long enough to get paid.

That's not incompetence. That's what undercapitalisation looks like in real life.

I know this because I've lived it. Years ago, I funded my cousin in the Free State for a few purchase orders. The first deal looked perfect on paper –100% margins, an obvious win. The bank wouldn't touch it. I stepped in personally, and initially it worked.

The final deal was a furniture contract. It failed at delivery. I was left with furniture I ultimately had to donate. I lost money. My cousin lost money. The government had to restart the RFP process. Nobody won… except the furniture supplier in that instance.

That experience taught me everything I needed to know about consistency, administrative rigour, and getting specifications right.

The risk isn't in Excel. It's on the ground.

Now imagine someone sitting in a well-ventilated office in Sandton (no shade, lol), judging that same deal purely from what’s on paper.

That’s simply not enough.

One of the biggest mistakes we make in funding is thinking risk is something you can fully understand from a desk.

Yes, numbers matter. But the real risk is physical. It lives in the transaction. In the environment. In the delivery conditions. In what happens when reality hits the plan.

I've learned this the hard way: if you don't understand the transaction physically, you don't understand the risk.

Let me give you a few examples.

Cold chain deliveries.

On paper, a delivery is a delivery. But in the real world, if a supplier arrives at a government gate with meat in a vehicle that isn't refrigerated, it doesn't matter what the invoice says, the delivery can be rejected immediately. No delivery. No sign-off. No payment. And now everyone is stuck: the SME, the supplier, the funder, the end-client. That's not a 'finance problem.' That's an execution problem, and it's completely predictable if you know what to look for.

'Simple' procurement that isn't simple.

We've seen deals where people assume the product is straightforward, until you realise what's being procured is regulated. In one case, drones weren't just 'equipment'. They were classified as military-grade items, which meant import licences and compliance steps that could delay delivery even if the funding was ready. Again: the contract wasn't the risk. The unmanaged delivery reality was.

Mining and PPE: the shortcut that becomes a disaster.

There are categories where cutting corners isn't just bad business, it's dangerous. If PPE is incorrect or low-grade, it's not only a compliance failure. It's a safety failure. Even if you 'save money' short term, the real cost shows up later: rejected stock, failed inspections, shutdowns, reputational damage, sometimes worse.

So, when we talk about governance, I'm not talking about paperwork. I'm talking about doing the right thing, at the right time, in the real world.

What a 'financing floor' actually means

When I say Black industrialisation needs a financing floor, I mean this:businesses need a predictable base of liquidity, execution support, monitoring, controls, and deal structure. Not so they can 'get rich'. So, they can deliver consistently.

Because execution stability has to come before scale.

Right now, we do the opposite. We expect SMEs to scale first… and then we consider supporting them. We set targets for outcomes, without building the conditions required to achieve them.

And then when delivery fails, we call it 'SME failure'.

But it's not. It's system failure.

Ceilings keep rising because the floor is missing

Here's the cycle we don't talk about enough:

When a business fails to deliver, trust resets. And when trust resets, institutions respond by tightening controls. More checks. More delays. More requirements. More proof.

So, the ceiling rises again.

But the floor still isn't built.

And the businesses that could have become stable industrial players stay trapped in survival mode.

That's why trust doesn't compound in this country. It gets restarted. Over, and over.

Procurement gives opportunity. Finance withholds execution.

In too many parts of our economy, procurement and finance behave like two separate worlds.

A contract is issued. A PO is signed. Then the supplier is left to figure out how to execute. And if the supplier can't, the system shrugs and moves on.

But if we're serious about industrialisation, we have to stop treating funding as something 'nice to have'. Liquidity isn't a reward for success. It's the infrastructure required to make success possible.

The standard we use: would we defend it publicly?

There's another part of this conversation people avoid: ethics.

Because alternative finance can either build the economy… or quietly extract from it.

At Oricred, we've walked away from deals that look profitable but are wrong in principle: inflated margins, exploitative pricing, transactions built on shortcuts, deals that would collapse the moment delivery is tested.

We use a simple test internally: if this deal was on the front page of the Sunday Times tomorrow, would we be proud to explain it?

If the answer is no, we don't do it.

If we build the floor, what becomes normal?

If we get this right, the outcome isn't just 'more SMEs funded'.

The outcome is industrial capacity that holds.

Black-owned factories become normal. Black suppliers become producers, not middlemen.

Skills and trades regain status. Execution becomes consistent. Trust becomes repeatable.

And capital starts moving with confidence, not hesitation.

That's what industrialisation looks like.

Not a ceiling. A floor.

Because you can't build anything lasting on air.