Family funds, bank loans, credit cards – where do you turn for money to finance your inventory? These have long been the big 3 sources of financing for independent retailers. In fact, many of us haven’t ever heard of fintech. The term (short for financial technology) refers to companies providing financial services to businesses using software and modern technology. Check out Fintech Weekly, a website listing conferences and other resources, to learn more about this growing field.

FundboxPay is a product offered by fintech company Fundbox. The rep agency Road Runners recently sent out an email blast offering approved gift retailers net 60 terms without interest when using FundboxPay for orders from Brandwise-enabled vendors. If you order from sales reps or at trade shows, you have undoubtedly placed orders on the Brandwise platform – described on their website as offering “mobile product presentations, automated sales order management, commission tracking and processing, sales analytics, robust B2B eCommerce, and easy management of product data.” That’s great from on the sales rep/supplier side – but what we love about Brandwise is that the system creates printed purchase orders that are legible and easy to work from.

The advantage to vendors of using FundboxPay is clear – the supplier invites a retailer customer to pay (a bit like Venmo), and the system then advances the funds to the vendor right away. Retailers get 60 days to make the payment, with no interest. The system makes money in two ways: by charging a weekly fee to retailers who end up extending the terms beyond the 60 days; and by charging the vendors a ‘clearing fee’ for the invoice, based on “the company’s health” and specific properties of the invoice.

According to the company’s website, Fundbox began in 2013 when one co-founder’s mother couldn’t get a loan to help grow her small business. FundboxPay in essence gives vendors an advance on the amount of their invoices, allowing them a better cash flow to grow their business. It also eliminates the need for the vendor to worry about collecting on net 30 or net 60 invoices, or having to absorb credit card processing fees when the retail account pays via plastic.

The advantage of FundboxPay to retailers is clear: you have the opportunity to get net 60 terms, which are becoming a rarity in our industry. Using this system – or a credit card – is a great way to extend the length of time you have to sell merchandise before paying for it. But here’s the catch:  it’s only free money if you make your payment on time, avoiding paying either the FundboxPay fee or credit card interest.

Happy Retailing,

Carol “Orange” Schroeder