---
title: "Lula Warns Late Payments Turn SA Suppliers Into Lenders"
description: "Lula says 30 to 90-day payment terms force South African suppliers to finance customers. LulaPay has disbursed nearly R1bn across 600 SMEs."
canonical_url: "https://liners.com/news/lula-late-payments-suppliers-involuntary-lenders-south-africa"
markdown_url: "https://liners.com/news/lula-late-payments-suppliers-involuntary-lenders-south-africa.md"
type: "article"
language: "en"
published_at: "2026-09-24T18:34:26.956Z"
updated_at: "2026-09-24T18:34:30.439Z"
---

# Lula Warns Late Payments Turn SA Suppliers Into Lenders

Lula says 30 to 90-day payment terms force South African suppliers to finance customers. LulaPay has disbursed nearly R1bn across 600 SMEs.

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## Content

## In Short
South African suppliers are increasingly acting like lenders because buyers are paying late. Lula says longer payment terms shift working capital pressure onto small businesses.

## What Happened
Lula said payment terms in South Africa are effectively turning suppliers into “involuntary lenders.” The argument was shared by LulaPay’s vice president, Jordan Gosling, as the country debates tougher rules to curb late payment.

In simple terms, when a supplier delivers today but accepts payment in 30, 60, or 90 days, the supplier is providing trade credit. That is like a short loan, except the supplier usually does not charge interest.

Gosling said suppliers still have to cover labour, inventory, tax, and operating costs while they wait. In many cases, suppliers accept long terms because larger customers demand them. Pushing back can risk losing contracts, and chasing late invoices can harm future work.

He also pointed out that suppliers do not underwrite risk like banks do. Banks can choose who to lend to, price risk, and set repayment conditions. A supplier often cannot, and may not get security or a formal credit agreement.

Lula positions its financing product as a way to bridge the cash gap on both sides of a deal. The company says it can help a buyer complete a purchase even when the buyer cannot pay upfront, while helping the supplier get paid sooner.

A September 23, 2026 report said [Lula](/lula-lend) had disbursed almost R1 billion in funding across 600 SMEs.

## Why It Matters
Late payment is a cash flow problem, not just an admin issue. For SMEs, slow cash collection can cause missed payroll, delayed restocking, and higher reliance on expensive short-term borrowing.

If supplier-led credit keeps growing, more B2B transactions may depend on embedded finance, which means financing built into the purchase process rather than a separate bank loan. That could change how South African SMEs price jobs, select customers, and manage risk.

## Sources and products

- [Infrastructure news](https://infrastructurenews.co.za/2026/09/23/south-african-suppliers-are-financing-their-own-customers)
- [Lula](/lula-lend)

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