Business cost phrases can go away suppliers financing their clients. Data provided by Lulapay illustrates how third-party funding modifications the timing of cost, who bears the financing value and the place reimbursement threat sits.
A sale can generate income earlier than it generates money. For a provider that should pay for inventory, labour and transport earlier than amassing an bill, that distinction issues.
Agreed cost phrases of 30, 60 or 90 days create a financing interval between supplying a buyer and receiving cost. If the client then pays late, the interval turns into longer and fewer predictable.
“When a provider delivers items or providers as we speak however agrees to obtain cost in 30, 60 or 90 days, it’s extending credit score,” says Jordan Gosling, Vice President of Lulapay.
The sensible query is who funds that interval—and whether or not the eventual sale leaves sufficient margin to cowl its value.
Set up when the cost clock begins
“Thirty days” is incomplete with out an agreed start line. A business association would possibly measure the interval from the bill date, receipt of a legitimate bill, supply, acceptance or a month-to-month assertion.
A provider ought to due to this fact join the cost time period to a selected occasion and perceive what the client requires earlier than processing cost. Lacking purchase-order references, disputed portions or incomplete supply data can create additional delays.
Agreed credit score and overdue cost additionally have to be distinguished. A buyer paying on day 60 beneath agreed 60-day phrases is utilizing the credit score interval offered. A buyer paying on day 60 in opposition to a 30-day obligation is paying late.
Each conditions require working capital, however they current completely different assortment and relationship-management issues.
Observe the money by means of the transaction
Lulapay is Lula’s business-to-business trade-credit product. Below the mannequin described by the corporate, an accepted purchaser makes use of a facility to pay a provider, then repays Lulapay over an agreed interval.
The provider receives cost from Lulapay on the customer’s behalf. The client’s reimbursement obligation is to the funding supplier.
That construction modifications who funds the transaction. It doesn’t take away the financing value or assure that the customer’s personal clients can pay on schedule.
In response to Gosling, suppliers are sometimes paid in full earlier than releasing inventory. Availability nonetheless will depend on the customer’s approval, facility and acceptance of the relevant phrases.
Who pays for the additional time?
Within the examples provided to AfricaBusiness.com, Lulapay described a flat month-to-month cost of two% on the unique quantity drawn down.
The corporate confirmed that its R40,000 development instance carried a complete value of R2,400 for about three months, together with the place repayments had been made in month-to-month instalments.
The calculation is:
R40,000 × 2% × 3 months = R2,400
Whole principal and financing value would due to this fact be R42,400 over the agreed schedule.
It is a cost on the unique quantity, relatively than a fee utilized solely to the declining excellent stability. A enterprise evaluating funding choices wants the precise reimbursement dates and quantities in addition to the headline month-to-month share.
Lulapay stated the quoted pricing included all relevant charges and taxes for the preparations described. Particular quotations, supplier-supported gives and introductory durations might differ, so these examples shouldn’t be learn as common pricing.
Three examples present completely different allocations of value
The corporate provided three anonymised transactions. They illustrate the mechanism, however haven’t been independently verified as buyer case research.
| Sector | Approximate bill worth | Approximate time period | Financing value | Who paid the fee |
|---|---|---|---|---|
| Renewable power | R800,000 | 30 days | R16,000 | Provider |
| Development | R40,000 | 90 days | R2,400 | Purchaser |
| ICT | R290,000 | 30 days | R5,800 | Purchaser |
Within the renewable-energy instance, the customer’s buyer launched cost as soon as inventory reached the location. Lulapay paid the provider, enabling supply, whereas the provider absorbed the R16,000 financing value.
For that provider, the business evaluation consists of whether or not the sale’s margin justifies paying for the client’s credit score interval.
In development, the corporate stated the customer obtained venture funds at milestones a number of weeks aside. Funding allowed the provider to obtain cost upfront whereas the customer repaid in instalments.
The related check for the customer is whether or not these reimbursement dates stay manageable if a milestone cost arrives later than anticipated.
In ICT, the corporate described a purchaser whose clients paid slowly whereas its personal provider required cost to keep up providers. Funding helped bridge that timing hole. Continued use would nonetheless require the enterprise to evaluate whether or not its underlying customer-payment cycle is sustainable.
Cost safety has an outlined scope
Lulapay instructed AfricaBusiness.com that its facility settlement is with the customer and that it has no declare in opposition to the provider if the customer fails to repay.
The corporate additionally stated supply, returns and high quality stay business issues between provider and purchaser. These duties shouldn’t be confused with the customer’s reimbursement default.
This description is predicated on the corporate’s written rationalization. AfricaBusiness.com was not supplied with the underlying facility settlement for impartial contractual overview.
Companies contemplating an association ought to receive the relevant paperwork and perceive their duties, together with how disputes and supplier-funded prices are dealt with.
What the figures set up—and what they don’t
In its October 2026 responses, Lulapay reported nearly R1 billion disbursed since March 2022 throughout 600 distinctive SMEs.
It additionally stated roughly 70% of patrons had returned for additional funding after their authentic transaction, measured throughout the product’s historical past.
These are company-supplied figures. Repeat use signifies continued demand, however doesn’t set up affordability, buyer profitability or reimbursement efficiency.
The corporate declined to reveal arrears and default information. It additionally stated it doesn’t instantly measure what number of gross sales would in any other case have been delayed or misplaced.
Its reported typical transaction vary of R100,000–R250,000 ought to due to this fact be understood as a spread, relatively than a disclosed statistical common or median.
Examine the reimbursement schedule earlier than committing
Lulapay stated early settlement carries no penalty and that future financing prices are waived when a purchaser settles early.
The quantity saved will depend on the precise schedule and settlement date. A purchaser ought to receive a dated settlement citation and perceive how prices already incurred are handled.
Earlier than accepting funding, the helpful comparability is between the anticipated buying and selling profit and the whole money dedication: principal, prices, reimbursement dates and the results of slower buyer receipts.
For suppliers, sooner cost can enhance certainty. For patrons, extra time could make a purchase order attainable. The association works commercially solely when the fee and reimbursement obligations match the transaction.
Reporting is predicated on written responses and clarifications provided by Lulapay in October 2026. Firm figures and anonymised examples haven’t been independently audited. This function examines the cost mechanism and doesn’t advocate a specific funding supplier.
