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C2FO Powers Early Payment Programs for the World’s Largest Companies.
Discover expert insights on working capital, cash flow optimization, supply chain management and more.
We believe all businesses can and should have equitable access to low-cost, convenient capital to grow and thrive.
C2FO stands for “Collaborative Cash Flow Optimization,” but that only explains part of the company’s mission to ensure all companies have the capital to thrive.
When it comes to accessing working capital, buyers and suppliers exist in a broken financial system. Buyers are negotiating longer payment terms with their suppliers, some as long as 90 to 120 days, to improve cash flow. In turn, suppliers are left with their hard-earned cash stuck in accounts receivable (AR). It’s a global problem, with an estimated $43 trillion worth of cash trapped in AR at any given time worldwide.
Banks are understandably concerned about potential loss and credit risk when lending. This concern leads to higher costs for borrowers. As a result, the traditional financial system leaves suppliers — many of which are small to mid-sized, women-owned, and/or minority-owned — unable to secure the working capital needed to grow. It also impacts buyers by weakening supply chains.
C2FO aims to eliminate the barriers and bias inherent in this traditional model by creating a more inclusive financial system — one that gives all businesses fast, flexible access to low-cost working capital.
What is C2FO, how does it work and what is behind the company’s mission?
C2FO helps businesses access working capital and optimize their cash flow to support business growth and fuel a stronger, more equitable global economy. “What happens when companies access more working capital?” asked Alexander “Sandy” Kemper, C2FO founder and CEO. “They run their businesses, they buy more inventory, and they hire more people.” When all businesses have access to the capital they need without restrictions — when the financial system is truly inclusive — businesses are empowered to innovate, thrive and fuel the larger economy. C2FO supports this mission through its on-demand platform and suite of working capital solutions:
C2FO’s Early Payment platform allows suppliers to request early payment, in exchange for a small discount, on approved invoices. Suppliers choose which invoices to accelerate and pick a discount rate with the help of C2FO’s patented Name Your Rate® technology, which ensures the buyer’s desired rate of return is met.
Suppliers can also use the C2FO CashFlow+™ Card to accelerate invoices without paying any discount — and earn 1% cash back on business purchases.*
Capital Finance, a suite of lending solutions from C2FO, integrates with the C2FO’s Early Payment platform, allowing suppliers to access additional working capital beyond early invoice payments through our global funding network.
These solutions serve all businesses along global supply chains, providing real-time visibility for suppliers and buyers into their accounts payable and receivable. Suppliers use C2FO to unlock trapped cash, get paid sooner (32 days, on average), improve cash flow and access funding regardless of systemic barriers in traditional financing models.
By paying suppliers early in exchange for a discount, buyers decrease their cost of goods sold and strengthen the supply chain. Early payments also increase buyer profit margins and EBITDA — in fact, C2FO has returned around $1B to buyers since 2010. Buyers with environmental, social and governance (ESG) initiatives can also use C2FO to incentivize and prioritize small to mid-sized businesses and those owned by minorities, women and veterans.
Since C2FO’s first transaction in May 2010, the company has delivered more than $262 billion in working capital funding, and has more than 2 million in-network relationships with companies across 160 countries. More than 200 of the world’s largest enterprise buyers, such as Costco, Walmart and Air France, have implemented our Early Payment platform, and hundreds of thousands of businesses have received early payments.
Traditional early payment solutions are static, nonnegotiable arrangements: Suppliers are often forced to accelerate all invoices at a buyer-determined discount. C2FO, however, offers a more flexible approach. Suppliers can set a preferred discount rate and decide which invoices to accelerate, while buyers set a target rate of return, ensuring that early payment requests are only accepted when the offer benefits both parties.
C2FO’s platform is easier to use than alternative solutions, such as supply chain financing or invoice factoring, which often come with complex contracts, seemingly endless paperwork and hidden fees. Unlike invoice factoring, C2FO also allows suppliers to continue owning and strengthening their customer relationships.
When it comes to business loans and other traditional working capital solutions available through banks, C2FO has several advantages. Not only is it more accessible to small businesses and diverse business owners — but it’s also faster to leverage, more cost-effective and eliminates the need to take on additional debt. Plus, users have continuous support from C2FO’s team of working capital advisors and supplier relationship managers.
Furthermore, C2FO’s platform is free for suppliers to use. There are no fees, so the only cost is the discount offered for early payment. That often makes it a more cost effective financing option compared to factoring or traditional business loans.
C2FO stands for “Collaborative Cash Flow Optimization.” But where does the term come from and what is the company’s overall mission? Like many good ideas, C2FO was born out of the need for something better.
In 2002, Sandy Kemper made a hard call while leading an earlier technology startup: He had an outstanding invoice totaling $1 million and needed to request early payment to cover operating expenses. The customer agreed to pay 30 days early at a 1% discount rate, but the situation led Kemper to two realizations.
First, his company’s strong customer relationship was crucial to receiving early payment. Second, the request could have eroded the customer’s confidence in Kemper’s company. Requesting early payment involved risk, and there was no way to determine mutually beneficial terms without manual, cumbersome processes.
This inspired C2FO’s launch in 2008, which was driven by using technology to eliminate these risks and inefficiencies, increase working capital and strengthen buyer-supplier relationships. At its core, C2FO is motivated by the belief that:
All businesses deserve convenient, equitable access to the low-cost working capital needed to grow.
An inclusive, win-win financial system ultimately enables innovation and stimulates the larger economy.
In 2022, C2FO supplied $78 billion in funding to businesses worldwide, helping suppliers grow, stock inventory, improve returns and create new jobs. Through expansion into markets including India, China, Europe and Australia, C2FO has set a goal of helping create more than a million jobs per year worldwide by 2025.
With interest rates expected to increase the cost of business loans in 2023, and rising inflation, C2FO aims to continue improving working capital access for small to mid-sized and diverse-owned businesses. In 2022, C2FO funded over 1,349 women- or minority-owned businesses, enabling them to access nearly 27% more early payment funding than in 2021. Additionally, the company has launched Opportunity Marketplaces with major global companies. These programs provide early payments and funding to qualified minority- and women-owned businesses at significantly lower rates.
By giving businesses access to low-cost working capital, C2FO is also supporting sustainable global economic growth and helping businesses meet the cash demands of ESG initiatives, such as those addressing climate change. At the 2022 G20 and B20 annual meeting, C2FO was recognized as a way to fund global carbon-neutral solutions by 2050.
Working capital is the lifeblood of commerce. Freeing the cash trapped between accounts receivable and accounts payable benefits everyone — enabling more efficient markets and greater liquidity for companies around the world.
Click here to learn more about C2FO’s story and mission.
This article originally published January 2020, and was updated February 2023.
*There are no load or maintenance fees. You do not get charged for getting paid onto the card. There is a 2.5% foreign transaction fee for purchases made outside the US and up to a 3% ACH to transfer funds off the card. The C2FO CashFlow+ Visa® Card is issued by Sutton Bank pursuant to license by Visa Inc. Visa is a registered trademark of Visa, U.S.A. Inc. All other trademarks and service marks belong to their respective owners.
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