A business lender has launched an innovative "buy now, pay later" product to fill a gap it has identified in the SME credit space.
Moula conducted a study of 500 business owners across Australia, which revealed that more than 40% took longer than 30 days to pay their dues, highlighting the need for extended payment terms.
At the same time, a significant portion of business owners communicated they struggle to provide extended payment options in-house due to their own cashflow concerns, limited credit knowledge and overhead costs.
The new product, Moula Pay, steps into this gap to enable merchants to offer affordable payment terms to certain business customers.
The arrangement benefits all parties, with merchants getting paid upfront by Moula, and business customers having access to improved cashflow with 12 months to repay the debt rather than one, with the first three months being interest and repayment free.
Moula CEO Aris Allegos said, “We know how hard it is for Australian businesses to access funding to support day-to-day operations and there’s opportunity on both sides of the merchant and business customer relationship with Moula Pay.
“We’ve evolved our data-driven business lending expertise, creating Moula Pay to address SME payments pain points, effectively doubling support for good Aussie businesses by backing merchants and simultaneously getting behind their good business customers as well."
Moula Pay is only available to businesses with an active ABN or ACN, which have been in business for a minimum of six months and generate more than $5,000 in monthly sales. Once a business is approved, it can purchase up to $250,000 worth of goods and services.
“Merchants [who participate] are able to outsource their credit management functions more cost-effectively than typically administering payment terms in-house. They’ve also opened the door to the significant pool of SMEs seeking to spend more on business purchases if they had additional funds and longer to repay,” said Allegos.
Moula suggests its new service can be used by businesses to get stocked as a retailer, buy equipment, pay for services, or buy materials for a project.
Established businesses including wholesalers, manufacturers, retailers, trade and professional services can apply to become an approved merchant.