Paying later in a turbulent economy

Matt Bird

Matt Bird

June 29, 2023

4 min read

You probably don’t need us to tell you that the economy is, lets just say, challenging at the minute.

Everything just seems to be getting more expensive, right? Time’s are tough.

We’re seeing ventures pulling back on hiring and growth, reducing overhead and re-structuring finances to preserve cashflow, extend runway and reduce their reliance on outside capital. And it’s for good reason.

9/10 of mid-market businesses are worried about a looming cash crunch. The past couple of years have been good for access to growth capital, but with the end of those cycles now getting closer, there’s an element of panic that starts to creep in.

When preferred capital sources dry up (VC, PE, Equity investment) many turn to credit solutions to fill the gaps. Frustratingly, traditional credit isn’t designed with our best interests at heart. Yes, we get short term access to capital but mid-longer term, we pay through our noses for it. With the rising interest rates currently too, it’s easy to see how interest can quickly spiral out of control. And then we’re trapped. We need better solutions here.

In the consumer space, Buy Now, Pay Later has risen to the top of the payments stack, with 40% of consumers abandoning checkout if there are no options to pay later.

Spreading payments cheaply and in a manner that doesn’t exploit us has evidently been front of mind for some time. BNPL, especially in consumer gets given a bad rep from the media, but for the vast majority that use it, this keeps them out of the spiralling interest trap.

We are seeing this movement coming over to B2B commerce. Companies now give you the ability to spread large payments over 2–12 months, with little to no interest. So that £25k invoice, now becomes a lot more manageable and you can really start to maintain good cashflow.

But can we go one step further? Should we actively be helping businesses save money for paying later or paying over time? Is simply spreading the payments enough? We don’t think so.

In 2023, the significant majority of all businesses rely on software to power their company. Everything from HR tooling to Marketing software— our dependency on SaaS has increased and will only continue to increase.

89% of companies we spoke to said they would be relying on more SaaS solutions as they grow.

SaaS pricing in itself has similarities to credit. Most companies will pay monthly to keep spend in control. For the pleasure of paying monthly, businesses will spend 20–40% (call it interest) more over the course of 12 months than they would if they just paid the annual price upfront.

Again, the vast majority just don’t or can’t part ways with that lump sum of cash upfront.

But what if there was ‘access’ to this cheaper annual rate, but the ability to pay that price over the 12 months? It’s obvious that there would be a saving of 20–40% pretty instantly. That’s more cash in the back pockets of businesses to save for a rainy day or invest in other areas of the business.

lemon let’s you do exactly this — it’s the first Subscribe Now, Pay Later product that saves you money for spreading payments, vs charging you more for spreading payments. It just makes sense.

So in an economy like we’re in today, you as a business, should be utilising ‘pay later’ vs credit as much as you can. You’ve probably used it as a consumer, why is this any different?

And if you have a high proportion of spend going out on SaaS, you should probably sign up to the lemon waiting list.

We’re also making as familiar as an e-commerce checkout. Enter the pay later opportunity at checkout on the pricing page, check your eligibility in seconds and be wrapped up in under 2 minutes. It’s almost never been easier to get access to credit like this.

Time is also an important factor here. When you’ve got bigger issues to solve, the last thing you want to be doing is faffing around looking for invoices, calculating your SaaS spend or updating your excel spreadsheet of costs.

Once you’ve paid with lemon, you’ll get your own management dashboard where you’ll be able to manage everything to do with that piece of software. Seats, user permissions, access credentials etc.

Once you’ve got more than one piece of software in your lemon account, you’ll be able to wrap them both up into a single transaction, so your accountant will love you and you’ll reduce the amount of time spent scrapping around in your inbox searching for that invoice to reconcile.

You can thanks us later.

  • Economy
  • Credit
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