Buy Now, Pay Later is essentially a payment method that allows customers to pay the full amount of their goods at a later time, despite having received the product upfront. Buy Now, Pay Later, also known as BNPL, is a payment method that has been gaining popularity specifically in the e-commerce domain.
While BNPL options are beneficial for customers in terms of ease of purchase and increased payment terms, they are also very beneficial for small businesses, and hence they should look for the buy now pay later for business options available to them. Given below are three benefits for businesses to use and avail of BNPL options in B2B partnerships and transactions:
1. BNPL helps in de-stressing your cash flow
As a small business, you are most likely always in need of additional cash flows, and hence it is not feasible for you to make necessary purchases back to back. In addition to your current cash flow, you possibly have your future cash flows already accounted for too. This may often restrain small businesses from making necessary purchases and hence limit their economic activity.
However, BNPL allows such small businesses to benefit from the ability to get whatever equipment or raw material they immediately need with the option to pay back in small installments when they can do so.
2. BNPL helps in avoiding overload of other credit lines
While small businesses may not always have cash in hand that their operations would need them to, they have alternative lines of financing such as banker’s acceptances, letters of credit, and credit cards. However, the use of all of these lines is often accompanied by heavy service charges and interest rates. In addition to that, the maximum amount that companies can spend on these lines may add up to very small amounts. In addition to that, small companies may hope to save these lines of credit for rainy days and rather not max out on them.
Hence, BNPL offers companies a viable solution in terms of being an entirely separate line of financing often with little to no fees at all. It hence helps small companies in avoiding the overload of other credit lines.
3. BNPL helps businesses enjoy seamless buying
Small businesses often struggle with the constant payments that they have to make for rent, salaries, and whatnot. Most of these payments are done in cash, and at the end of the day, small businesses struggle with making due payments for what brings money into their business: equipment and raw material. Businesses cannot fully succeed if they do not have the freedom to buy raw materials as needed, or cannot purchase the equipment required for research and development.
BNPL plans hence allow small businesses to enjoy seamless buying in terms of customized payment plans. Businesses can pay back upon their convenience in small investments and ensure that their business cycle runs smoothly.
Buy Now, Pay Later options are equally beneficial for customers and businesses alike, but even more so for small businesses in terms of increasing their operations and easing logistics. The above-mentioned benefits of BNPL dictate just how important it is for companies to avail of BNPL as an accepted payment method.