How to take advantage of B2B financing (Buy Now Pay Later) to grow your business?

Swifteam

May 31 - 6 min read

B2B financing is the process of providing financial assistance to businesses to purchase goods or services from other businesses. This type of financing is typically used by businesses that have a strong need for capital, but may not have the necessary funds available at the time of purchase. There are several different ways that businesses can obtain B2B financing, including loans, lines of credit, and leasing arrangements. Each option has its own set of benefits and drawbacks, so it is important for businesses to carefully consider their needs before selecting a financing method. B2B financing can be a great way for businesses to obtain the capital they need to grow and expand their operations. However, it is important to remember that this type of financing comes with its risks and challenges. Businesses should carefully consider the options before selecting a B2B financing method to ensure that it is the best fit for their needs.

With innovation in tech and regulatory policies such as Open Banking, new financial players are regularly appearing in both the business-to-consumer (B2C) and B2B worlds. Companies can even directly provide their clients with financial services via embedded financing (see below).  

There are many unique features of financing for B2B that differentiate it from B2C financing. These include the higher value of finance required and the use of invoice financing. The need may arise for various reasons: payroll funding, technology investment, inventory, insurance, or managing cash flow.

Embedded B2B financing: Offering financial services to your clients


The concepts of embedded payments and finance are essential to modern business. Used to B2C levels of seamless payments and even credit, customers in the business world increasingly expect a frictionless purchase experience. 

Embedded B2B financing has been defined as “the use of financial tools or services — such as lending or payment processing — by a non-financial provider.” By directly offering finance, B2B service providers remove another obstacle for customers, who don’t need to spend time searching and signing up with third parties. Being able to offer financing solutions to B2B clients ensures robust cash flow, which ultimately supports sales for all parties and positive trading conditions. As with embedded payments, the more seamlessly this can be done, the better.  

With our research, we have found 3 vendors for providing embedded B2B financing:

  1. TreviPay: A 40 years old company that processes over $6 billion in transactions a year. They offer credits and net terms. API integration is available. As one of the oldest B2B financing companies, they offer robust support on the financing side. TreviPay doesn’t offer a prebuilt and hosted payment page, similar to Stripe Checkout, which merchants can directly embed at the checkout flow. The payout time for merchants is 48 hours.
  2. Balance: A 2 years-old YC company wants to provide a low-code solution for B2B credit lines and net terms. They provide a prebuilt and host payment page as well as white-labeled APIs. The payment page also offers ACH and credit card options so merchants don’t have to integrate with Stripe separately for credit card transactions. The payout time for merchants is within a day. The merchant fee is 2% of the invoice amount. 
  3. Slope: A recent YC company offers a very similar product to Balance. Slope’s strength is on the buy now pay later (BNPL) which merchants can offer multiple installment options in dollar amount rather than in percentage, similar to the popular Affirm or Klarna BNPL offering to consumers. The merchant fee is based on what option that a customer chooses to pay.

This is one of the Pay Later screenshots by Slope: