Using BNPL to Boost Net Income

Introduction

In today's competitive business landscape, companies seek innovative solutions to fuel growth and increase profitability. One such solution is our Buy Now Pay Later (BNPL) product, a financial tool that unlocks tremendous opportunities. This blog post explores the transformative power of a $2,000,000 BNPL credit line priced at an 18% APR extended to Company ABC, as an example. We will examine how it strategically benefits Company ABC by boosting sales, increasing profits, and outweighing interest costs.

‍

Harnessing Financial Leverage

A fully utilized $2,000,000 BNPL line priced at 18% apr incurs a $360,000 interest cost, which may initially seem daunting. However, the real value lies in the transformative potential of financial leverage. By effectively utilizing the BNPL line, businesses can leverage purchasing power, securing larger inventories from suppliers. This increased supply capacity equips them to meet customer demands, seize market opportunities, and drive overall sales growth.

Expanding Sales Revenue and Profitability

Utilizing the BNPL line, businesses can significantly boost sales. Assuming Cash Conversion Cycle of 60 days, the $2,000,000 BNPL line would support a COGS increase of $12,000,000, and assuming 20% gross margin for Company ABC, a remarkable $15,000,000 annual increase in top-line revenue is achieved.