B2B BNPL vs Net Terms: Which Should You Offer?

B2B customers today expect flexible payment options that help them manage cash flow and align payments with their own revenue cycles. Two popular business credit solutions in B2B payments are Buy Now Pay Later (BNPL) and traditional net terms.

In this article, we explain how each option works, compare benefits and drawbacks, and provide guidance on which solution may be the best fit for your business.

What Are Net Terms?

Net payment terms are an agreement that allows a buyer to receive products or services immediately and pay for them within a set period after the invoice date. Common timelines include Net 30 (one of the most widely offered and financially sustainable payment terms), Net 60, and Net 90, depending on the arrangement.

The short-term financing net terms offer is especially important for businesses that may struggle to get approved for traditional trade credit. It gives them access to the goods and services they need, while helping them maintain a healthy cash flow and protect working capital.

Advantages of net terms

• Most businesses expect net terms, and offering them helps attract new and repeat customers.
• Buyers are more likely to make larger purchases more frequently.
• Providing terms shows trust and helps build long-term relationships with your customers.
• You differentiate your business from competitors who require cash upfront.

Disadvantages of net terms

• Waiting 30, 60, or 90 days to receive payment can strain your operating capital and affect your financial health.
• Late or missed payments are common. 55% of B2B invoices are overdue, and bad debts affect about 9% of credit-based sales.
• Managing credit approvals, invoice financing, receivables, and collections can become complicated as your business grows.
• Offering net terms exposes your business to credit risk and can lead to delayed payments or buyer defaults, especially when you extend to multiple customers at once. A B2B financial partner like Credit Key can help you run credit checks so you can confidently offer net payment terms without taking on unnecessary risk.

What is B2B BNPL?

Buy Now Pay Later (BNPL) is a payment option that lets B2B customers place orders right away and settle the bill at a later date.

Once the purchase is approved, the BNPL provider absorbs the initial costs and pays the merchant upfront, while the buyer repays the provider based on the agreed terms.

BNPL solutions benefit both sides of the B2B transaction. They allow buyers to make purchases without paying everything at checkout, while merchants can complete sales without waiting weeks or months for invoice payments to come through.

Unlike B2C BNPL, which is mainly used for smaller consumer purchases, B2B BNPL is designed to support higher order values, repeat buying, and longer payment cycles (via installment payments) that fit how businesses operate.

Advantages of B2B BNPL

• BNPL gives buyers more room to manage cash flow and plan spending without tying up funds at the point of purchase.

• Offering BNPL can help B2B merchants reach new buyers who prefer to pay over time.
• This payment method fits well in sectors where revenue comes in waves or sales cycles take longer to close.
• Giving customers multiple payment options can help your brand stand out in competitive markets.

Disadvantages of B2B BNPL

• B2B BNPL often involves large purchases, and if a buyer defaults or fraud occurs, the loss can be significant. To avoid this, you need to perform a real-time credit assessment before extending credit.
• Rules around credit and data handling vary by region and change frequently, which makes it harder to stay compliant.
• Integrating BNPL into older systems can be tricky because legacy software doesn't support BNPL out of the box. Working with a platform that connects to major ecommerce solutions like Shopify and BigCommerce makes all the difference.

Key Differences Between B2B BNPL and Net Terms

• Payment timing: With net terms, you have to wait for buyers to pay after 30, 60, or 90 days, but with B2B BNPL services, you get paid upfront while your buyers spread their payments over time.
• Administrative effort: Net terms require you to manage invoicing, approval processes, and collections yourself, whereas BNPL handles that work for you.
• Credit risk: With net terms, you take on the risk if a buyer pays late or defaults, but B2B BNPL providers handle most of that risk for you.
• Credit checks: Choosing net terms means you are responsible for evaluating each buyer’s credit profile. BNPL providers, on the other hand, usually handle all underwriting and risk assessments.
• Instant approvals: BNPL gives buyers fast, real-time credit decisions, helping you close sales quickly without waiting for lengthy approval processes.

Which Business Credit Should You Offer?

Both B2B BNPL and net terms have their pros and cons, and the right choice depends on your business model, cash-flow needs, the size and frequency of your orders, and the customers you serve.

Net terms are best if:

• You have established relationships with your buyers.
• You operate in industries where deferred payments are standard, such as wholesale, manufacturing, or large institutions.
• Your buyers are familiar with invoicing cycles and predictable cash flow.

B2B BNPL is right when:

• You sell high-value items or large orders.
• You want to simplify checkout and offer buyers the ability to pay in installments while you get paid upfront.
• Your buyers are seasonal, growing, or need more flexible payment schedules.

If you can't decide, you can offer both options so your buyers have even more flexibility while you protect your revenue and cash flow.

Credit Key: Your Net Terms and BNPL Partner for Smarter B2B Payments

Choosing the right payment solution for your business, whether it’s B2B BNPL or net terms, is an important decision that affects your cash flow and customer relationships. Here are some reasons why Credit Key is worth considering as your payment partner:

• Simpler net terms management: Credit Key removes the complexity of Managing Net 30 payments. You get paid in full within 48 hours of a purchase, while Credit Key handles underwriting, billing, and collections.
• Flexible B2B BNPL options: For larger orders or repeat purchases, Credit Key offers Buy Now Pay Later with terms up to 12 months. Buyers can spread payments over time, while you receive full payment upfront.
• Friction-free integration: The platform works with major ecommerce systems like Shopify, Magento, WooCommerce, and BigCommerce, so setup is quick and easy.
• Fast approvals and high credit limits: Credit Key uses real-time underwriting to provide instant credit decisions for lines up to $50,000. The platform assumes 100% of the risk and pays you within 48 hours.
• Transparent, predictable costs: Credit Key keeps pricing simple with a flat fee for merchants and clear payment terms for buyers. There are no hidden costs or confusing rates.

Calculate the ROI of Credit Key for your company, or contact our sales team to learn more.

FAQs

Which industries are best suited for BNPL vs Net Terms?

Net terms are a great fit for established industries like wholesale and manufacturing, while BNPL works well for high-value, seasonal, or growing businesses.

How does BNPL affect cash flow compared to Net Terms?

BNPL allows you to get paid upfront by the provider, which helps keep your cash flow steady. In addition, BNPL often drives higher average order values (AOV) because buyers can spread payments over time, making larger purchases more manageable. Net terms, on the other hand, are typically viewed as standard operating practice in B2B and don’t usually increase order size. They also require you to wait for payment, which can create cash flow gaps and add financial risk.

Choose What Works for You

At the end of the day, the right payment option should match your cash-flow reality to your customers’ needs. Whether you lean toward net terms or BNPL (or both), you need a good payment partner like Credit Key that handles the heavy lifting so you can focus on selling.