Given your background, can you give a brief overview of the Fundbox platform and how your previous experience has influenced your current role?<\/em><\/p>\n Jason: <\/strong>Absolutely. For those that might not be familiar, Fundbox<\/a> is a financial technology (Fintech) company that has built the first B2B payments and credit network designed to accelerate B2B commerce at scale. If I were to boil down what our team at Fundbox does, I would say that we\u2019re committed to helping B2B businesses pay or get paid faster, by using advanced machine learning to assess credit risk and then, for approved businesses, we provide access to credit on-demand. We\u2019re intent on bringing a B2C transaction experience to the world of B2B.<\/p>\n Here\u2019s why this is important\u2026<\/p>\n There\u2019s almost no business in the U.S., regardless of age, size, industry or location, that hasn\u2019t been challenged at some point in time, to maintain a steady cash flow while waiting for outstanding invoices to get paid.\u00a0 And conversely, businesses that rely on some form of payment financing (trade credit or net terms) in order to purchase their inventory upfront, are clamoring for faster credit decisions and more flexible terms so they can purchase more quickly and then have greater flexibility to pay over time.<\/p>\n The way in which businesses buy and sell between one another needs to evolve if they\u2019re going to keep up with the rapid pace of digital commerce. And, that\u2019s why Fundbox exists.<\/p>\n This is a great segue to tell you a bit more about my background.<\/p>\n Before joining Fundbox, I was at PayPal for 13 years where I led global channel sales and business development. My time there gave me a great front-row seat to watch the evolution of B2C payments which PayPal has more or less defined.<\/p>\n It was during these years that I not only learned what consumers wanted from their payment experiences but also what businesses wanted when transacting with each other as well.\u00a0 As consumers, we\u2019ve all benefited by the years of investment in technologies made by PayPal, Visa, American Express, Mastercard that have made B2C transactions a fast, convenient, seamless and transparent experience.<\/p>\n And yet, B2B transactions have not evolved at the same pace as B2C, which is what led me to join Fundbox. I understood the challenge but, more importantly, I saw a very real opportunity to change the status quo in the way B2B businesses pay or get paid. It\u2019s not often that you have the opportunity to address such an enormous need so early on in the game.<\/p>\n Fundbox is well-positioned to be the dominant player in B2B payments and credit space, much like PayPal has been in the world of B2C transactions.\u00a0 I am very excited to be part of the team that is driving true business transformation.<\/p>\n Oro: <\/strong>It\u2019s tough launching a business from scratch and it can be even tougher to reach a point of steady, predictable cash flow. Many business owners take out traditional bank loans, apply for a line of credit, access merchant cash advances, or borrow from friends and family in order to help cover expenses like renovations or project costs. Can you share some of the challenges or pitfalls of these financing options?<\/em><\/p>\n And what are some of the benefits of these traditional financing options, if approved?<\/em><\/p>\n Jason:<\/strong> The first thing to know is that businesses use credit for all kinds of things ranging from startup funding to filling in cash flow gaps when sales are slow or when invoices are paid late. And, because the need for credit is usually time-sensitive, frustration grows when the application process for a line of credit or loan is time-consuming, complicated and slow.<\/p>\n Having to wait for a credit decision means that you may be forced to put off important business decisions that are tied to credit approval. All business owners know that waiting (for a credit decision) works against you when you\u2019re trying to close a deal or make a much-needed purchase.<\/p>\n Instead, many business owners opt to \u201cbootstrap\u201d their finances by going to family and friends or by liquidating personal assets. And then, once you\u2019re up and running, the next battle you face is to modulate your cash flow in order to keep it steady and consistent. This is where services like merchant cash advances or payday loans start to show up. These sorts of financial tools can be used to fill in cash gaps while waiting for outstanding invoices to be paid.<\/p>\n However, anytime a business takes out credit to triage their cash flow, they run the risk of getting into deeper financial issues such as \u201cloan stacking\u201d which, is when you take out multiple loans with the intention of using one to pay off the other.<\/p>\n Sometimes needing credit can be a symptom to a bigger issue, one of which could be the lack of predictable cash flow. With many businesses, it\u2019s hard to forecast if or when your customers will pay you on time, despite clear agreement on net terms.<\/p>\n For example, if you\u2019re a B2B seller you may struggle with getting your customers to pay on time because they might have their own cash flow disruptions. And then, you add the fact that by offering net terms, you\u2019re essentially locking up your own cash flow for 30, 60, 90 and in some cases 120 days.\u00a0 This puts the business owner \u201cbetween a rock and a hard spot\u201d as their tying up their cash flow that\u2019s compounded by customers paying late. It\u2019s this coalesce of events that trigger the search for credit as a safety net.<\/p>\n At the end of the day bank loans, lines of credit, merchant cash advances and other credit-related services are there because business owners need access to credit for a variety of reasons.<\/p>\n At Fundbox, we\u2019re here to help optimize the way business funds flow so businesses get paid faster or can pay for their purchase faster. In either case, we\u2019re here to make access to credit simple, fast, transparent and ideally, more predictable. If we\u2019re successful in our mission then over time, we hope to change the mindset of thinking about credit as a safety net to instead thinking about credit as a growth catalyst.<\/p>\n Oro: <\/strong>Oro has partnered with Fundbox to publish a new whitepaper that was recently released titled “The New Net Terms Economy.” In this whitepaper, you’ve coined a new term called “Net Terms Economy<\/a>.”\u00a0<\/em><\/p>\n Can you define Net Terms Economy and how has the popularity of B2B eCommerce affected it?<\/em><\/p>\n Jason: <\/strong>Of course! We coined the term \u201cNet Terms Economy<\/a>\u201d after completing a research study in partnership with one of our industry\u2019s leading media outlets, PYMNTs<\/a>, earlier this year. And, I have to say that the results were eye-opening.<\/p>\n We found that there is an astonishing $3.1 trillion or 17% of the U.S. GDP owed to U.S. firms that are locked up in accounts receivables \u201climbo\u201d as outstanding invoices. With the sheer size of this out-of-reach pool of capital, we can assume that almost every business in the U.S. has some amount of cash flow tied up in this economy. Either as a seller providing net terms or as a buyer that relies on net terms so they can pay for their purchases over time.<\/p>\n For years, the status quo in the way businesses transact with each other, has disrupted cash flow and made the predictability of payments, challenging.\u00a0 And for businesses that rely on net terms from their suppliers, there is the constant worry that there won\u2019t be enough time to pay off their terms in a timely fashion. This has been the default way to conduct business but, it doesn\u2019t have to be this way moving forward.<\/p>\n With new open sources of data, advancements in machine learning and data science, a business like Fundbox can not only optimize but also accelerate the way business funds flow.<\/p>\n This means that sellers no longer have to wait to get paid.\u00a0 Imagine no more accounts receivables? And for buyers, they now have more flexible repayment terms that work best for their business needs without putting undue stress on their cash flow. This is why it\u2019s been so exciting to work at Fundbox because we\u2019re actually unlocking access to the Net Terms Economy using machine learning to drive faster payments and fact access to business credit.<\/p>\n Oro: <\/strong>The main philosophy behind trade credit is \u201cbuy now, pay later.\u201d With that philosophy, what incentive would a buyer ever have to pay on time?<\/em><\/p>\n Jason:<\/strong> This is a great question. Most buyers that apply for net terms do so because they don\u2019t have the cash upfront and they want the ability to modulate their cash flow by spreading out payments. So not paying right away works to their advantage. But, this strategy doesn\u2019t necessarily win over their suppliers who end up compromising their own cash flow to accommodate the needs of their customers.<\/p>\n However, neither side has to be at a disadvantage, because we have both knowledge and technology to make a B2B transaction, mutually beneficial. We\u2019ve created a data-centric platform that enables buyers to continue to pay over time with greater flexibility, and we can pay sellers right away. At Fundbox, we believe there\u2019s tremendous value in creating a \u201cwin\/win\u201d solution so that each side of the transaction gets what they need when they need it the most.<\/p>\n Oro: <\/strong>As B2B commerce has digitally evolved towards B2B eCommerce, how has a shift in technology affected how B2B businesses operate with funding and managing business loans?<\/em><\/p>\n Jason<\/strong>: In a pre-Fintech world, and even to some extent today, your average B2B commerce experience is unfortunately too slow and laborious.\u00a0 For example, you might have a procurement person going to a supplier\u2019s portal to look at inventory, pricing and then having to submit a purchase order via email, fax or an order capture system.\u00a0 Once that order is received, the supplier\u2019s accounting or risk department would need to run a credit application on the potential buyer in order to determine if the business is qualified to receive net terms. If the applicant is approved, then the next step would be to negotiate terms.<\/p>\n Not only is this process time-consuming both for the supplier and the buyer, but it also won\u2019t scale to meet the needs of a global e-commerce buying audience. This is an important point to make, that without fast and accurate risk assessment at scale, B2B businesses will not be able to reap the same benefits of e-commerce in the way that B2C businesses have.<\/p>\n What B2B businesses need is a unified payment and credit platform that analyzes risk provides on-demand access to capital paying sellers right away and providing buyers with more flexible terms. That pretty much sums up Fundbox.\u00a0 We\u2019ve created this solution that meets all of buyer and seller transaction requirements with the goal of transforming the way all businesses transact online.<\/p>\n Oro: <\/strong>Companies like Fundbox are relatively new in the payment industry. How has Fundbox’s solution to the Net Terms Economy dilemma help facilitate B2B payments and give B2B businesses access to capital?<\/em><\/p>\n Jason<\/strong>: We\u2019ve been analyzing the way businesses transact with one another since the company\u2019s inception and, what we found is that B2B businesses would like to transact as fast and efficiently as their B2C counterparts. No surprise there. And yet, unlike the world of B2C that\u2019s benefited from payment networks like Visa or American Express, there\u2019s been very little innovation to accelerate B2B payments or enable faster access to business credit.<\/p>\n And that\u2019s what we\u2019re working on to change.<\/p>\n In order for B2B businesses to transact like B2C businesses with their customers, three critical factors need to be addressed at the same time.<\/p>\n The first factor is to assess credit risk.\u00a0 When an unknown buyer comes to a supplier for the first time and is asking for terms, it is the credit risk analysis by the seller that determines if the buyer is eligible for net terms.<\/p>\n As mentioned previously, this process of assessing credit risk has historically been cumbersome and slow, forcing both the seller and the buyer to wait. And, at the end of this process, there\u2019s no guarantee that the buyer will be approved. And in that case time, resources and opportunity are wasted. Fortunately, with new advances in machine learning, we are able to asses credit risk in as little as a few minutes. This enables both the seller and the buyer to quickly know the buyer will be qualified for net terms.<\/p>\n The second factor that needs to be addressed is that business credit should be made available to buyers faster so they can complete their transactions and then quickly move on to the next task on their list.\u00a0 And, if we address risk quickly, then there\u2019s no reason why buyers couldn\u2019t have more flexible terms to work best with their cash-flow considerations. This is a powerful combination because it gives buyers greater financial agility for purchasing and repayment.<\/p>\n The last factor to address is the speed at which we pay sellers. With machine learning-enabled credit risk addressed and faster access to credit for approved buyers, there\u2019s no reason not pay the B2B seller right away. For a fee starting at 1.75%,\u00a0much like merchants pay to a credit card provider, B2B sellers can get paid as soon as the next business day once the transaction is accepted by the buyer. That means that the money sellers have tied up in accounts receivables, becomes available.\u00a0 Imagine how getting paid right away would enable businesses to focus on growth instead of just treading water.<\/p>\n It\u2019s the combination of these three things that is the key to unlocking the Net Terms Economy and driving real business transformation.<\/p>\nChallenges of Acquiring Funding Through Traditional Means<\/h2>\n
![\"net](\"https:\/\/oroinc.com\/b2b-ecommerce\/wp-content\/uploads\/sites\/3\/2019\/11\/Oro-checkout-4@2x.png\")
<\/p>\nDefining the Net Terms Economy<\/h2>\n
![\"reduce](\"https:\/\/oroinc.com\/b2b-ecommerce\/wp-content\/uploads\/sites\/3\/2019\/11\/Oro-checkout-1@2x.png\")
<\/p>\nThe Evolution of Moving into the Digital Era<\/h2>\n
![\"net](\"https:\/\/oroinc.com\/b2b-ecommerce\/wp-content\/uploads\/sites\/3\/2019\/11\/Oro-checkout-0@2x.png\")
<\/p>\n