The Value of Early Pay, Even When You Don’t Think You Need It

Early payment programs are often viewed exclusively as a source of quick cash. But for many businesses, they are also a smart way to strengthen working capital and create new opportunities for growth.

C2FO Early Pay gives you control. It helps you manage short-term needs, optimize your capital strategy, and preserve flexibility without taking on debt. For companies with strong cash positions or established financing, it’s a strategic advantage that supports smarter financial decisions.

At C2FO, we see suppliers use Early Pay not as a reaction to a cash crunch, but as part of a disciplined approach to capital management.

When You Already Have Accounts Receivable Financing (Factoring or Asset-Based Lending)

When your business is waiting for buyer payments, you may rely on accounts receivable financing through factoring or asset-based lending (ABL) to maintain cash flow. Here is how adding C2FO Early Pay to your existing financing arrangement significantly enhances your financial position:

Lower Financing Costs: When you take early payment through C2FO’s platform, you instantly shorten the time your accounts receivable needs to be financed. Because factoring fees and asset-based lending interest are calculated over time, usually daily or monthly, reducing that time directly lowers your financing costs.

Faster Reserve Release: Both factors and asset-based lenders typically hold reserves or holdbacks against your receivables (often 10 percent to 15 percent of invoice value) until your customer pays. By using C2FO to get your invoices paid faster, you pay down your lender balance sooner. That allows the lender to release the reserve earlier, giving you access to cash much faster than you would receive it otherwise.

Results:
By using C2FO Early Pay alongside your accounts receivable financing:

• You save on total costs.
• You receive more cash overall.
• You get your reserve payment sooner.

When You Already Have a Line of Credit

When your business needs working capital, you may already have a line of credit (LOC) in place. Here is how C2FO Early Pay can work alongside your existing credit facility to create even greater financial advantages:

How They Work Alongside Each Other

Prioritize C2FO for key customers: Request early payment through C2FO from suppliers who can accelerate invoice payment at a small discount. This provides immediate liquidity at the lowest cost.

Use LOC for remaining receivables or other needs: You can use your line of credit to fund working capital or inventory purchases for other business requirements not covered by C2FO.

Replenish the line using C2FO receipts: When you receive early payments through C2FO, you can pay down your line of credit. This frees up credit capacity and reduces interest expense.

Optimize timing and cost: Compare C2FO discount vs. LOC interest to decide which to use each time. This helps achieve a lower blended cost of capital.

Benefits of Combining C2FO + LOC

• Lower cost of capital: Use the cheaper source first (C2FO) before drawing on higher-rate credit lines.
• More liquidity: Both tools expand your working capital options.
• Credit line flexibility: Early payments from C2FO free up LOC availability.
• No new debt from C2FO: Improves leverage ratios and balance sheet health.
• Dynamic decision-making: Treasury can decide invoice by invoice which option gives better economics.

When You Don’t Need Cash Right Now

Even if liquidity isn’t a concern, Early Pay can still deliver returns. Many businesses use it to fund near-term opportunities that create measurable value, such as:

• Purchasing inventory ahead of demand
• Securing supplier discounts or capacity
• Financing short-term marketing or operational initiatives
• Improving key financial KPIs such as days sales outstanding (DSO) and cash conversion cycle (CCC)
• Ensuring a cash reserve in times of uncertainty

If the expected return from those investments exceeds the discount cost, Early Pay becomes a growth tool, not just a funding option.

When You Already Use Early Pay

If you’re already accelerating payments with one or more buyers, you can improve your cash flow even more by adding newly approved invoices or recently enabled buyers to your offers. The more invoices you include in your early pay request, the more flexibility you gain in financing new opportunities or improving financial KPIs.

A regular recurring review can help identify new acceleration opportunities, monitor rates, and stay consistent with your working capital goals. You can log in to the C2FO platform at any time, review your eligible invoices, understand pending payments, evaluate deductions and more, making C2FO the smart tool for working capital management.

Results: Suppliers who diversify across multiple buyers through C2FO improve their overall discount rate and increase the average number of days paid early by an average of 32 days across their buyers, strengthening liquidity without additional effort.