What is B2B finance and how does it work?

B2B (business to business) finance involves financial transactions between two companies rather than between a business and individual consumers. This includes financial products and services such as trade credit, invoice financing, asset-based lending, and supply chain finance, which are essential for helping companies work together to manage their cash flow, assets and growth.

By offering your customers a flexible way to pay for big purchases, a B2B finance programme can help you acquire new business customers and incentivise current customers to stay.

How does B2B finance work?

B2B finance involves lending money to other businesses, typically for the purpose of doing business with them. This can include services such as loans, but mostly takes the form of breaking down purchases into multiple payments.

Businesses don't always have the cash flow to pay for big-ticket items. By offering B2B finance to your business customers, they get the freedom to pay for purchases in regular instalments, in turn giving them more buying power.

The benefits of B2B finance

There is a range of B2B financing benefits to businesses that offer financing programmes. By choosing to provide finance, you can offer flexible payment terms that your business customers will appreciate.

Boost sales

Financing can boost your overall sales by giving your business customers more freedom in how they buy. The biggest obstacle towards making large purchases is often the upfront price. Talking about financing options from the very beginning can remove any objections to business customers making a purchase.

Acquire more customers

By offering B2B business loans, you make your products and services more affordable for a wider range of possible customers. This enables you to increase your customer base, which is good for both profit and growth.

Raise the average price of an order

You can use B2B finance to upsell customers, which can help you increase the average order value for your business. With financing, it’s good practice to show customers what a small increase in their monthly loan payments can get them if they pay a little extra.

Strengthens relationships with customers

When you offer financing programmes to your business customers, it helps build trust and strengthen relationships. Customers appreciate being able to buy from businesses that understand their needs and are willing to offer flexible payment terms.

How to offer B2B finance to your customers

Offering B2B finance to your business customers has to be done in the right way. To ensure that you're meeting the needs of both your business and your customers, there are a few things you should keep in mind:

Do your research

The first step to offering B2B financing is finding the right provider for your business. There are a lot of options on the market, so you need to do your research and find a provider that offers products that fit your business’s needs. Consider factors like repayment schedules, fees, and interest rates.

Get set up

Once you’ve selected a provider, you should get set up with their B2B financing solution. This process can vary depending on the provider, but generally, you’ll need to fill out an application and provide some documentation about your business. 

Train your staff

After you’ve been approved, it’s important to train your staff on how to use your program. They should be familiar with the different financing options available and how to explain how they work to customers. It’s also a good idea to run through some scenarios with your staff so they can handle different customer situations.

Promote your financing options

Make sure your customers are aware of the financing options available to them by promoting them on your website, in your store, and in any advertising material you use.

With iwocaPay, you can send invoices to customers and get paid all at once. Even if your customers need more time to pay, we’ll pay you on their behalf as soon as they check out. Your business customers can even pay-by-link, making it quick and easy for you to take payment.

Offering payment terms to suit your customers makes it a no-brainer for them to shop with you over your competitors, too.

iwocaPay makes financing your business customers simple and reliable. Get paid on your terms, every time.

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