Accounts-receivable financing that advances invoices based on the large buyer's credit
Advance payment to small businesses that are waiting for invoices to be paid by large, creditworthy customers. The financing decision can focus on the buyer's ability and commitment to pay rather than charging the smaller supplier as if it carried the entire credit risk. The concept was discussed as a version of "pay me sooner" and was not pursued by the speakers.
From a16z — Why AI Agents Could Finally Reinvent the Credit Card at 07:37
Problem: Large companies can impose long payment terms on smaller suppliers, forcing those suppliers to borrow at materially higher rates even when their receivables are owed by a strong corporate buyer.
For: Small businesses and suppliers that must pay employees and operate while waiting for large customers to pay on extended terms such as net 90.
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Examples
- A small supplier invoicing GE on net-90 terms: the supplier may need to borrow to pay employees even though GE is expected to pay the invoice.