The pros and cons of using BNPL in your business

If you’re on the fence about whether to use a buy now, pay later (BNPL) app for your business expenses, here’s a look at the pros and cons.

Choosing the right financial tools for your business requires careful consideration. They should save you time, give you new insights, and be reliable. But while you probably use a variety of tools to carry out accounting, payroll, and invoicing tasks, you may still be on the fence when it comes to BNPL. 

To help you decide if a BNPL app is right for your business, we’ve compiled a helpful overview of the biggest benefits and addressed some of the most common concerns.

Biggest benefits of using BNPL in your business

One of the biggest benefits of using BNPL in your business is having access to finance when you need it. Instead of going through a lengthy application process and providing collateral, such as your home, to receive a bank loan, you can usually apply for a BNPL solution in just a few minutes on your phone with no security required. You also tend to get approved quickly, since many apps use advanced technology, such as artificial intelligence, to make decisions in the backend. 

Another benefit of BNPL apps is the fee structure. Rather than charging interest, many BNPL apps charge fees for late payments and other services they provide. Unlike credit cards, which countless small businesses rely on to fund their operations and often charge different rates depending on the size of your repayment, it’s easy to understand what you owe with BNPL. 

And because BNPL apps came out of the consumer market (today they’re used by an estimated 46 per cent of Australians and 31 per cent of New Zealanders), the user experience tends to be clean and simple – a must for small business owners who don’t have a lot of spare time to learn new tools.  

Common concerns about using BNPL in your business

One of the most common concerns about BNPL apps is around late fees and getting stuck in a cycle of debt. This tends to be based on stories in the media about consumers who have used BNPL apps and missed payments because they owed more than they had in their bank account. While the majority of users never miss a payment, those that do can struggle to get back on track once late fees start accumulating. 

It goes without saying that anyone who uses a BNPL app should be in good financial health. As a business owner, that means you should be profitable and cashflow positive. And before you start using just any BNPL app, make sure you’re aware of all their policy and fees around late payments. 

For instance, hummpro will always offer a grace period and try debiting your accounting a second time before charging you a fee of $20 if you miss a repayment. 

Find out more about how hummpro differs from other BNPL apps and why it might be right for your business here. 

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