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How SMBs Can Increase Working Capital

SMB-Money

Part 2 of our 3-part series on Common Challenges of B2B Commerce

In the first of our 3-part series, we outlined how payment on Net30 terms is common in B2B. In fact, from the outside looking in, offering payment on terms seems like a given. Many SMBs feel they must offer terms to be competitive, but they overlook the risks of late payers and the impact of late payments on working capital. 

Every time a seller extends payment on terms they must consider several factors. 

Will the buyer pay on time?
Will late payments affect working capital?
Will late payments affect sales to other customers?

Knowing the answers to these questions is especially important for SMBs.

Research indicates SMBs, in general, assume too much risk when offering trade credit. Consider SMBs selling to large, enterprise buyers who delay payments in favor of investments in other projects. Joanne Simpson, Corvative CEO, found that a one-month delay in payment by Wal-Mart is associated with a 1.2% reduction in capex (capital expenditure) for a Wal-Mart supplier. 

Credit as a Service® mitigates risk for SMBs while preserving Net30 payment terms.

Credit as a Service® (CaaS) is a MSTS payment solution that facilitates transactions between SMBs and their buyers. Our innovative solution allows sellers to offer credit to buyers while preserving working capital and offloading risk to MSTS. Our team underwrites and approves buyers for credit in under thirty seconds at transaction fees 30% less than credit cards. 

Credit as a Service® frees you to spend more time on meaningful projects, while we manage your A/R and assume the risk of late payments and bad debt. 

Are you ready to take the jump? Let’s talk!

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