24 January 2025
Small and Medium Enterprises (SME) are the backbone of global economies and yet their growth continues to be stifled by cashflow challenges which are caused by delayed invoice and poor access to working capital credit. In the UK alone, SMEs account for 61% of total employment and contribute significantly to GDP. Small businesses are insufficiently equipped to offer flexible terms to their customers seriously harming their chances of accepting new customers. Late payments on invoices is a well known issue, for some of the businesses this could mean being out of business and we know that translates to job losses and erosion in economic value built over time.
Over 65% SMEs in Scotland face delayed payment issues as of October 2024. These companies often spend an average GBP22k/year on chasing invoices. There are significant risks involved with selling to new customers. This creates a working capital gap most companies do not get out of. The big lenders will not look at these small businesses favorably. This is where the solutions for B2B Buy Now Pay Later (BNPL) come in, like Affivo a revolutionary solution that address these challenges and unlock new opportunities of business expansion.
Affivo’s simple solution helps a seller accept more customers and offer flexible terms instantly without any risk to them. With our risk engines we can help with offering net terms instantly along with superior financial dashboard to efficiently run your AP/AR.
There are various solutions to transfer money from one business to the other but whats missing is a good, trusted solution that SMEs can use to get paid early, actively increase their sales at zero risk instantly. B2B BNPL differs from traditional methods of SME financing by removing the pain of negotiating terms with new and unknown customers which they don’t trust. New customers may be hard to understand and hard to underwrite and they can not be all visited personally - this is where we come in - we take care of the credit risks, fraud risks and relationships.
We take care of this in the back end where we make risk decisions/counterparty risk assessment in the transaction.
B2B BNPL solutions allows SMEs to offer flexible payment terms to their buyers while ensuring they get paid upfront. Here’s how it works: when a business (seller) sells another business (buyer), the seller will typically get paid out the next day as if it was a card transaction while we make sure the customer is not fraudulent, we do the credit underwriting of the customer and take care of the payment processes on the back end. So, all in all an SME can put their B2B payments on autopilot but still offer various kinds of net terms of payments that businesses prefer and want when they purchase on behalf of the business.
This model not only eliminates the seller’s risk but also gives buyers the breathing room they need to manage their cash flow.
For SMEs, this means no more waiting weeks—or months—for invoices to be paid. Instead, they can focus on expanding their business, accepting new clients, or investing in growth. With cash flow no longer a life threat, businesses can seize opportunities they might otherwise have had to pass up.
B2B BNPL effectively transforms SME operations by ensuring immediate payments against invoices by providing certainty of cashflows and enabling confidence in financial and commercial planning. It helps attract more buyers with flexible payment terms, boosting sales and more sticky customer relationships. By shifting credit risk to the provider, SMEs can fend off non-payment risks. The solution by automating invoicing and payment processes improves efficiency, freeing resources for growth. Additionally, BNPL preserves working capital, allowing SMEs to invest in inventory, technology, and expansion without financial strain.