Alternatives to Trade Credit for Business Customers in New Zealand
Not every business can get a 30 day trade account, 60 day supplier terms, or a traditional business credit account. Maybe you're a new customer. Maybe your supplier has tightened their credit policy. Or maybe they simply want to be paid upfront. If you need to protect business cash flow without relying on supplier trade credit, here are 5 options.
Why Some NZ Businesses Miss Out on Trade Credit
Traditional trade credit — a 30 day account, 60 day supplier terms, or a standard business credit account — has always been the default way New Zealand businesses buy from their suppliers. But it isn't available to everyone, and it isn't always the right fit even when it is.
A new customer without trading history might not clear a supplier's credit check. An existing customer might find their supplier has tightened its credit policy after a run of late payers. Or a supplier might simply prefer to be paid upfront rather than carry the risk themselves.
5 Alternatives to Traditional Trade Credit
Here are five ways NZ business customers can protect cash flow and still make the purchase, even when a supplier won't offer payment terms.
Business credit card
A business credit card can give you a short interest-free period to purchase stock, materials or equipment before cash leaves the business. Useful for smaller purchases, but limits can be restrictive and interest gets expensive quickly if you don't repay it on time.
Bank overdraft or revolving credit facility
An overdraft gives you access to working capital when you need it, without having to negotiate payment terms with every supplier. It can work well for established businesses, although getting approved can require financials, security and an existing banking relationship.
Business loan or working capital loan
A short term business loan can fund inventory, supplies or other operating expenses upfront. This gives you more flexibility over where you spend the money, but you're generally taking out a separate loan rather than financing the specific supplier purchase.
Asset or equipment finance
If you're buying equipment, machinery, vehicles or other business assets, asset finance can let you spread the cost over time rather than paying your supplier entirely upfront. This can be a good alternative to supplier payment terms for larger purchases, although it's generally limited to eligible assets rather than everyday stock, inventory or general supplier invoices.
B2B instalments through PaidTerms
If your supplier doesn't offer trade credit, PaidTerms can let you pay a supplier invoice in instalments while the supplier still gets paid upfront. Instead of asking the supplier for 30 or 60 day terms, you finance the individual invoice and spread the payment over time — another way to access B2B finance and working capital without relying on the supplier to fund the transaction themselves.
Comparing the Options
Each option suits a different kind of purchase. Here's how they stack up against each other.
| Option | Best for | Main limitation |
|---|---|---|
| Business credit card | Smaller, everyday purchases | Restrictive limits, expensive if not repaid on time |
| Bank overdraft / revolving credit | Established businesses with ongoing working capital needs | Requires financials, security and a banking relationship |
| Business loan / working capital loan | Funding inventory or operating expenses upfront | A separate loan, not tied to the specific purchase |
| Asset or equipment finance | Larger purchases of equipment, machinery or vehicles | Limited to eligible assets, not everyday stock or invoices |
| B2B instalments through PaidTerms | Financing a specific supplier invoice | Supplier still gets paid upfront while you spread the cost |
How B2B Instalments Through PaidTerms Work
PaidTerms turns a single supplier invoice into an instalment plan. Instead of asking your supplier for 30 or 60 day terms — or relying on a credit card, overdraft or loan that isn't tied to the purchase — you finance the specific invoice and repay it over an agreed schedule.
For the supplier, it means faster payment and less accounts receivable risk, since they're paid upfront rather than carrying the debt themselves. For the buyer, it means another way to access B2B finance and working capital without needing the supplier to fund the transaction — useful whenever trade credit isn't available or isn't the right fit for a particular purchase.
Frequently Asked Questions
What can a business do if a supplier won't offer trade credit?
A business credit card, bank overdraft, business loan, asset finance or B2B instalments through a provider like PaidTerms can all be used to spread the cost of a purchase when a supplier won't offer 30 or 60 day terms directly.
Is trade credit the only way to buy now and pay later in business?
No. Traditional trade credit is just one option. The right financing choice depends on what you're buying, how quickly that purchase generates cash, and how long you actually need to pay it back.
How is financing a single invoice different from a business loan?
A business loan is a separate facility that can be spent on anything, while financing a specific invoice — as with PaidTerms — ties the repayment directly to that purchase, and the supplier is paid upfront rather than waiting on the loan being drawn down and paid across.
Does asset finance work for everyday stock or supplier invoices?
Generally no. Asset finance is usually limited to eligible equipment, machinery or vehicles rather than everyday stock, inventory or general supplier invoices, which is where invoice-based instalments through PaidTerms can fill the gap.
Related Topics
To understand the difference between trade accounts and business instalments, see Trade Accounts vs Business Instalments.
To learn what business instalment payments are and how they work for NZ businesses, see What Are Business Instalment Payments?
For a supplier's perspective on why trade credit can be costly to offer, see The Hidden Cost of Offering Trade Credit.
Another Way to Pay a Supplier Invoice
If a supplier won't offer trade credit, PaidTerms lets you pay their invoice in instalments while they still get paid upfront.
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