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The advantages of getting payment terms

The majority of trade between small businesses has traditionally required full payment upfront. That burden on small businesses could be significant, especially when a company is required to pay the entire order amount upfront, then wait up to 45 days for the goods to arrive.

Enter payment terms. This type of financing option allows you to place orders with a small down payment, usually 30%, then defer the remaining payment amount up to 60 days from when your products are shipped. This deferred payment option is usually a handshake agreement, so it has no cost to you as long as you pay it back on time. does offer a payment terms service designed with small businesses in mind. A third-party financial service provider, MSTS, approves users ahead of time, so sellers know they are good for the money and are more likely to agree to offer payment terms to them. You can learn more about how the product works and what you need to apply at the end of the article.

How to get your supplier to offer payment terms

While payment terms have become common in the US, they’re still not as widely used in cross-border B2B trades. You may have to ask for payment terms and even do some negotiating to get the seller to agree to extend payment terms from the start and write it into your contract.

You have a better chance getting it from sellers with Payment Terms, because you are backed by a third-party financial institution. Or you can ask the seller directly. Regardless, you will need to negotiate with the seller.

Here are a few of our top tips for negotiating payment terms into your contract:

  • Introduce your company and qualifications. Sellers are more inclined to offer deferred payment terms to established companies with proven sourcing power. Be sure to address points such as how long your company has been around, and what level of purchasing you do, if it’s impressive.
  • Communicate clearly. Keep your messages short, concise, and free of spelling errors. Clearly say how many units you want to buy, your shipping destination, how frequently you want to buy, and what questions you have. This way, you’re taking steps to minimize confusion and sending a signal that you’re someone who is serious about placing an order.
  • Be clear. Always inform the seller upfront that you want to use payment terms, and that any contract must be drafted with payment terms written into the contract. Remind them that more cash flexibility may allow you to increase your order volume, or that their flexibility now will make it easier for you to recommend them to others.
  • Explain how payment terms benefit both of you. Any vendor will be more likely to bargain with you if they’re getting something back in return. What can you offer in exchange for payment terms? Will the freed-up cash allow you to increase your order volume? Will you use that cash to pay down debt, increase margins, or move into higher-priced products? Tell them.
  • Be flexible yet firm. Know there are times when applying a little pressure will give you the upper hand in negotiating payment terms. Tell them you’ll have to look for other sellers who do offer terms and buy from them. Or tell them that your finance department only allows buying from sellers who offer payment terms.
  • Guarantee an order when payment terms are offered. If you promise to place an order if the seller agrees to payment terms, you have a better chance of getting said terms. Payment Terms:

To apply for this service, you need an account in good standing, a valid business domain email address, and must be in the US. Here are some of the benefits you’ll receive upon approval:

  • After receiving an invoice for an order on, you get up to 60 days to pay off the balance
  • Approved users receive a credit line ranging from US $5,000 up to US $2 million
  • It’s a quick online application where you could be approved immediately with no impact to your credit score for applying
  • There are no transaction fees, compared with the usual 2.95% charged today
  • There are no hidden fees when using Payment Terms. Simply pay the 60-day terms on time.

To learn more about Payment Terms and to apply, go here. If you prefer the mobile experience, go here.

If you want to learn more about your payment options, and how they’re changing with the current global trade climate, be sure to check out this round-table discussion featuring Kivanc Onan, Head of B2B Payments, Financing, and Protection for North America.

This week's #B2BTuesday Tip:

Having a good relationship with your supplier is a strong sign that you're as invested in their success — as they should be in yours. The better your relationship, the more likely a vendor is to consider and accept your request for payment terms. A good negotiation leaves both parties happy with the outcome.

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