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7 Things You Should Know About Buy Now, Pay Later Facilities

Buy Now, Pay Later facility.

We’ve all been there, haven’t we? A golden opportunity is just within reach, but your progress is hampered by the familiar snag of cash flow.

This could feel like trying to sprint ahead in a race with your laces knotted together – no matter how vigorously you strive, the finish line always slips further away. This does not need to be the outcome, BNPL could be the solution your business is looking for.

Reasons to Consider a Buy Now, Pay Later Facility for Your Business: 

A Buy Now, Pay Later (BNPL) facility is beneficial for increasing cash flow, reducing risk and offering customers time to pay off invoices with flexible repayment plans. With that said, they do not come without risks. Learn about BNPL, and how you can take advantage of it with Lulapay, Lula’s Trade Capital offering.

Here are two reasons to consider using a trade capital option like BNPL: 

  • Buy Now, Pay Later (BNPL) can help your business by increasing cash flow and reducing risk due to faster payment from sales.
  • BNPL offers customers up to 6 months to pay off invoices with flexible repayment plans, aiding with better budget management.

1. What is Buy Now, Pay Later (BNPL)?

Buy Now, Pay Later (BNPL) enables customers and businesses to handle money smarter. It’s like a friendly helping hand that lets customers grab what they need now and spread the cost over time.

No fuss, no waiting.

Imagine you’re at checkout with a trolley full of goods but prefer not to pay for all of it simultaneously. This is where BNPL  is useful; it breaks down your bill into bite-size payments. 

Plus, there are no surprise interest rates lurking around. It’s clear-cut and straightforward – just how we like things for our SMEs and business owners. Lula offers its own BNPL facility, Lulapay, to help your business with cash flow, and provides a flexible option for your customers. 

2. Benefits of Buy Now, Pay Later for Businesses 

Businesses can benefit from BNPL facilities through increased cash flow, reduced risk and better customer relations. This can ultimately lead to improved business stability and growth opportunities.

Increased cash flow

Say goodbye to waiting for payments and hello to an instant cash injection from sales.

You deliver your goods. BNPL solutions, like Lulapay, make sure the cash rolls in consistently.

This boost means you’re ready to reinvest in your business quicker. Stock up on inventory, grab growth opportunities, or keep a cushion – it’s like having superpowers for your business.

Reduced risk

Not only does BNPL pump up the cash flow, but it also lowers the risks. Its a safer bet. Customers tend to keep their side of the deal and pay back on time because they love the flexibility.

That means fewer headaches about unpaid bills. Plus, since you’re getting paid upfront through a discounted purchase price, you’re protected if a customer’s credit goes south.

This model is excellent for businesses – it keeps your business humming without worrying about risky debts. 

By handing over some of that risk to BNPL providers, you can focus on what you do best – growing your SME and satisfying your customers. 

Better customer relations

We get it. You want to keep your customers smiling and coming back for more. 

With Buy Now, Pay Later facilities, it’s easier to make that happen. By offering flexible repayment terms, you give your customers the power to purchase what they need without stress.

They appreciate being able to spread the cost over time – it’s good for their cash flow and great for your relationship with them.

This freedom means they’re likely to think of you first the next time they need something. Plus, you’re showing them trust by granting creditworthiness without any fuss.

It’s all about making business smoother and connections stronger

3. How BNPL Works for Businesses

Businesses can easily submit their invoices to BNPL solutions like Lulapay,  customers can then apply and accept the payment plan. Thereafter the Buy Now, Pay Later facility will settle the invoice for the customer. 

Customer application and acceptance

Applying for Buy Now, Pay Later with Lulapay is a breeze! Your customers simply fill out an online application. It’s speedy and straightforward – no heaps of paperwork needed. We’ve made sure it’s all user-friendly so your customers won’t get stuck in loops of complicated procedures.

Their credit gets a quick check, ensuring everything fits within their budget. 

Once they hit ‘submit’, we review the details. The approval is fast once everything is verified. 

Your customers are happy because they get flexibility; your business benefits because your cash flow gets a boost. It’s a win-win every time. 

Submitting invoices to Lulapay

Have an invoice you’d like to cash in fast? With Lulapay we ensure that, as a supplier, you don’t have to wait ages for payment. With Lulapay’s quick assessment, your invoices can turn into immediate cash.

You get the money upfront while your customers pay later.

Once Lulapay approves those invoices, you’re all set. No more sleepless nights wondering about cash flow. Keep your business moving smoothly, and let Lulapay handle the waiting game.

Settlement of invoices using the Lulapay facility

No more waiting for payments to trickle in; we take care of it so you can keep your business humming smoothly. Your customers can use the Lulapay facility to settle invoices so that you can say goodbye to cash flow worries

Just like that, your finances are looking brighter, and you’re ready to focus on growing your business without money hiccups slowing you down. 

4. Benefits of BNPL for Customers

Customers using Buy Now, Pay Later facilities enjoy flexible repayment plans and can take advantage of up to 6 months to settle their invoices. This allows for better budgeting and management of cash flow.

Flexible repayment plans

Flexible repayment plans offered to customers gives them the freedom to manage their finances efficiently by eliminating the urgency for them to pay for their invoices up front. With BNPL, customers can split retail transactions into smaller, interest-free instalments. 

With a BNPL facility customers have up to 6 months to pay off the cost of goods or services in a way that suits them.

5. How to Open a BNPL facility

An alternative Buy Now Pay Later facility.

You can complete an online application , submit your customer’s invoices and we will assess your customer and offer them a Lulapay facility with a repayment plan for their invoices. This will give your customer’s the flexibility of up to 6 months to pay. 

Completing an online application

Completing an online application for BNPL is quick and straightforward

With just a few minutes of your time, your customers can access credit for their purchases. The process is user-friendly, requiring minimal personal and financial information.

Opening a Lulapay facility

After completing an online application, the next step is opening a Lulapay facility. Once approved, you’ll gain access to a funding platform that provides immediate payment for your invoices and your customers will receive Buy Now, Pay Later terms.

Receiving a repayment plan for invoices

Once the Lulapay facility is opened, customers will receive a tailored repayment plan for their invoices. This plan offers flexible terms and allows customers to choose whether or not they accept the conditions outlined.

The repayment plan commonly includes an outline of potential interest charges or late fees related to missed payments.

6. Qualifying Criteria for BNPL

For Lulapay, your minimum turnover must be R40,000 a month. Your business must also be a South African business operating for at least one year. Your business can’t be an NPO, PBO or Government entity. See more information on prohibited industries

This ensures that established SMEs access the facility with a proven business activity and financial stability track record.

It’s an opportunity for thriving businesses to leverage their turnover into flexible payment options for customers through Lulapay’s innovative platform.

This requirement emphasises our commitment to supporting growing enterprises with accessible trade capital, tailored financing solutions, and streamlined cash flow management. 

7. Risks and Considerations for BNPL

It’s important to acknowledge that using a BNPL facility can impact a customers credit score, and there may come the temptation for customers to overspend. However, it is up to your customer to understand and consider the risks. 

Impact on credit score

BNPL facilities can affect your customers credit score. Late payments on BNPL facilities may cause significant harm to a person’s credit report, impacting their overall creditworthiness.

Furthermore, while maintaining good BNPL payment records is important for your customers financial health, it may not necessarily enhance their credit standing. 

It’s essential for customers to carefully consider the potential impact on their own credit score when using a BNPL facility to make informed financial decisions.

Potential for overspending

It is essential to acknowledge the potential for customer overspending when utilising BNPL. These deferred payment options may tempt customers into exceeding their budget and making purchases they wouldn’t typically afford immediately.

Staying vigilant and effectively managing BNPL facilities is crucial to prevent falling into a pattern of overspending and maintain financial stability.

Pros and cons of BNPL

Managing spending with BNPL might be tricky for some customers. The pros and cons of this payment option weigh heavily on a business’s decision to adopt it.

The pros and cons of Buy Now Pay later facilities.

Lula’s SME Funding Opportunities  

Lula offers a range of financing options for professionals, including business funding. With access to trade capital and advances, small and medium-sized enterprises can easily streamline their cash flow management.

Financing options for professionals

SMEs can explore financing options through Lula, gaining access to trade capital

The Buy-Now-Pay-Later facility offers an opportunity for professionals to bolster their financial stability while minimising risks associated with traditional credit mechanisms.

Overall Value and Benefits of BNPL Facilities 

BNPL facilities offer valuable benefits for both businesses and customers. Businesses can enjoy increased cash flow, reduced risk, and improved customer relations through this innovative payment option. Lula’s BNPL facility Lulapay is a funding option well worth considering. 

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