Explore how businesses bridge the cash-flow gap between invoicing and payment through trade credit, covering the invoice lifecycle, underwriting, and risk management. Compare four financing models—embedded BNPL, factoring, supply chain finance, and corporate cards—that reallocate this gap differently across buyers, sellers, and financing providers.
Business-to-business (B2B) commerce runs overwhelmingly on trade credit, not on immediate payment. When one business sells to another, the seller typically ships goods or delivers services first and gets paid later — in 30, 60, or 90 days, or longer. This course explains how that arrangement works end to end: how it is originated, financed, risk-managed, collected, and measured, and how a growing set of technology providers has built businesses around making it faster and less risky for sellers to offer.
This overview maps the territory before you go concept by concept. It introduces the central problem trade credit creates, the lifecycle that every invoice moves through, the main ways that problem gets financed, and the vocabulary you will need throughout the rest of the course.
When a seller ships an order on net terms — for example, "Net 30," meaning payment is due 30 days after invoicing — it incurs the cost of producing or sourcing the goods immediately, and under standard accounting it books the revenue at the point of sale. But the cash itself does not arrive until the buyer pays, weeks or months later. During that window, the seller has delivered value and recorded a sale without having the cash to show for it.
The buyer experiences the mirror image of this arrangement as a benefit: it receives goods or services now and can use them — resell them, incorporate them into production, generate its own revenue from them — before it has to pay for them at all. This is working-capital flexibility, and it is a large part of why trade credit is the default way businesses buy from one another, rather than paying cash on delivery.
This seller-side gap, between the moment an invoice is issued and the moment cash is actually collected, is the single problem that nearly everything else in this course exists to address. Embedded B2B "buy now, pay later" (BNPL), invoice factoring, supply chain finance, and corporate cards are four different commercial answers to the same underlying question: who bears the cost and risk of that gap, and who gets paid to bridge it?
The gap between invoicing and collection is the structural problem that trade credit financing models are built to bridge.
Every B2B credit sale moves through a common sequence of stages, regardless of which financing model sits underneath it. Understanding this lifecycle gives you a shared frame for comparing the different models covered later in the course.
Each stage carries its own risk and cost, and the various financing models you'll study differ largely in which party performs each stage and who bears the risk if the buyer never pays.
The trade credit lifecycle: every invoice-based B2B sale passes through these stages, whether handled in-house or outsourced to a financing provider.
A few terms recur across every model in this course, so it is worth fixing their meanings early:
The course compares four major models side by side. At this stage, the goal is just to recognize them as distinct answers to the same cash-flow problem — later concepts go deep on each.
Each model moves the cash-flow gap to a different party, at a different cost, with a different risk allocation — which is exactly the lens the rest of the course will use to compare them.
Two threads run through everything that follows. First, credit risk: every model above ultimately rests on an assessment of whether the buyer will pay, and how that risk is priced and absorbed. Second, measurement: metrics like days sales outstanding (DSO) give you a way to quantify how well a business is managing its side of the cash-flow gap, and to judge whether a given financing choice is actually improving collection performance or just masking a problem.
By the end of the course, you should be able to trace a single B2B transaction from purchase order to cash application, explain where the cash-flow gap sits at each stage, and knowledgeably compare how pay-by-invoice, factoring, supply chain finance, and corporate cards each reallocate that gap — including how the providers behind each model make money and compete for business.