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Extended Payment Terms in COVID-19

COVID-19 has caused mass unemployment and business closures, drastically changing how almost every industry conducts business. As a result, many companies have extended payment terms to the businesses they work with.

What are Extended Payment Terms?

Extended payment terms are policies for which grants its customers more time to pay their invoices. Extended payment terms can be anywhere from 60 to 120 days.

Extended Payment Terms in COVID-19

Supply chains and related businesses have extended their payment terms in the pandemic to manage their cash flow during the economic recession. Many industries have been negatively affected by the pandemic, especially with the mandated shutdowns and stay at home orders from the state governors. Extended payment terms have helped some businesses stay out of debt.

For small businesses, the extended payment terms have drastically changed the typical payment schedules used by the companies that they work with. This is anything but ideal for small businesses given that most of them already have funding gaps from the pre-pandemic payment schedules.

More than 100,000 small businesses have been forced to permanently close their doors.

What Can You Do?

To help your business survive during and past the pandemic, utilizing outside financing is vital. While traditional lenders have been pressed to provide loans to struggling businesses, alternative financing solutions is another option that can help keep your business alive.

Invoice factoring is one of the alternative financing solutions that can help struggling businesses, especially during this pandemic. Factoring your invoices entails selling your unpaid invoices for immediate advance cash.

Even with the extended payment terms, factoring your unpaid invoices gives your business the funding it needs to pay bills, make payroll, and supplement your working capital.

Factoring will provide your business with the financial security it needs during the pandemic and after should you choose to continue factoring.

Accel Business Funding has provided invoice factoring and has funded many businesses for more than $380 million. When banks say NO, we say YES to funding in 24 hours!


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