As the spread of the coronavirus slows, the resulting economic impact will be felt for years to come. No one could have imagined in 2020 American business would grind to a halt, shopping malls would be ghost towns, restaurants and bars ordered to close and planes at 10% capacity would be unprofitable to fly. Cash flow has dried up, as businesses struggle to hang on.

When it’s all over, and be assured it will end, what will the business community have learned and will behavior change? Businesses that do manage to survive this pandemic will likely come out much weaker. Cash flow will be strained, debt will undoubtably have increased and recovery will be slow. Consumer finances will likely be strained as well. Bankruptcies could be a one-two punch taking down already weakened sectors. 

It might be time to rethink how business sells to business (B2B). Although retail, hospitality and tourist sectors have lost customers, they may be the first to recover. Consumers coming out of sequester will resuming shopping, eating and traveling. These business that serve consumers (B2C) will recover quickly because of their immediate access to cash flow from customers using credit cards to make purchases. Commercial businesses, B2B, that have sold and continue to sell their products and services on 30, 60 or 90 day terms, may be hamstrung for a quick recovery, due to their capital tied up in account receivables. A flood of bankruptcies could also diminish A/R assets making it even more difficult to survive. 

Is it time for B2B to reconsider terms of sale and what credit risk is acceptable?  Financing your accounts with a bank may help with cash flow, but still leaves sellers with dangerous credit risk. Banks can also be skittish during tough times restricting access to credit. 

Maybe it’s time to consider selling commercial goods the same way (B2C) businesses do. Companies like AeroPay Express have services that will pay for goods when they are delivered and give Buyers the terms they have come to expect.  And they assume the risk of non-payment should the buyer not pay due to insolvency. 

New technologies and easy access to capital has made the old idea of vendor financing obsolete. It’s time that the B2B community look to services like AeroPay Express to reinvent the supply chain and keep cash flow moving.