How NZ B2B Suppliers Can Offer Trade Credit Without the Risk

For B2B suppliers, trade credit is part of the deal. Customers expect 30 or 60 day terms, and offering them can win bigger orders. The problem is that every invoice on terms ties up your working capital and carries the risk of not being paid. Here is how New Zealand suppliers can offer competitive terms without carrying all the risk themselves.

What is trade credit?

Trade credit is when you supply goods or services now and let the customer pay later, usually within 30 to 60 days. It is effectively an interest-free loan from you to your customer. It helps you compete and lets customers order more, but it means you are financing their purchase out of your own pocket until they pay.

The hidden cost of offering terms

Trade credit is rarely free for the supplier:

• Working capital is tied up: you have paid for stock, freight, and labour long before the cash comes back.
• Bad-debt risk: if a customer fails to pay, you wear the loss on goods already delivered.
• Collection workload: chasing slow payers takes time your team could spend selling.
• Terms drift in practice: 30 day terms often become 60 or 90 in the real world.

How to offer terms more safely

There are a few ways to reduce the risk of offering trade credit:

• Run credit checks and set sensible limits for new accounts.
• Take deposits on large or custom orders.
• Use clear written terms and a registered security interest where appropriate.
• Use a third-party payment solution so you are paid upfront while the customer still spreads the cost.

Getting paid upfront while customers pay over time

This is where Fee Funders fits for suppliers. Your customer can spread the invoice over 3, 6, 9, or 12 months, while your business receives the full invoice value once their first instalment clears, typically within 7 to 10 days of approval. The result:

• Your stock, freight, and labour costs are covered quickly instead of months later.
• The credit risk sits with us, not with you.
• Your customer gets the flexible terms they want, so you can compete on more than price.
• Your business pays nothing. The customer covers the financing cost.

Resetting slow-paying accounts

Trade credit also helps with customers who have already drifted into chronic late payment. You can issue a consolidated invoice covering the aged balance and offer it on a payment plan. The customer signs up once, the balance comes off your aged-debtor report, and the repayments are collected for you.

Offer trade credit with confidence

You do not have to choose between winning the order and protecting your cash flow. To see how it works for supply businesses, visit our B2B suppliers page or learn the basics on our invoice financing page.