WHY THE MONEY DOES NOT COME

Everybody would lend against a confirmed order. Nobody can see one.

Order financing is one of the oldest ideas in trade. It fails here for a boring reason, which is that the lender has no way to know the order is real, and the workshop has no way to prove it without handing over its customer.

• 01

  The order is a WhatsApp message

  That is genuinely how most of these are placed. It is binding in practice and worthless as evidence.

• 02

  Showing the buyer is dangerous

  A workshop that reveals its customer to a financier has handed over the one thing that makes it valuable. Plenty of them have watched that go badly.

• 03

  The lender cannot verify delivery

  Even if they believe the order, they have no way to know the goods shipped and the buyer paid, except by asking the workshop.

• 04

  So the rate reflects the blindness

  Informal lenders in craft towns charge accordingly, and the workshop takes it, because the alternative is losing the order.