Customer Credit Terms Support (CCTS)
Finance to support the provision of trade credit
Customer Credit Terms Support (CCTS)
Customer Credit Terms Support (CCTS) offers an innovative approach for businesses aiming to enhance cash flow, customer relations, and credit control. Facilitating upfront payment while allowing your customers to pay over a period up to 12 months, CCTS can be likened to Invoice Finance but with greater flexibility in the selection of specified clients and specific sales routed through it, and you have the option to either pass on or absorb CCTS interest costs.
CCTS streamlines the process for you to offer terms to your customer through rapid credit checks and limit assessment, thus enhancing your credit control, bolstering your cash flow, and improving customer retention.
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Who & what is CCTS for
Customer Credit Terms Support (CCTS) is particularly beneficial for B2B businesses that encounter cashflow and/ or risk control challenges in respect to providing credit terms to their customers. Such businesses typically operate in sectors where credit terms are expected or where extended terms can help win business. By using CCTS, these companies can offer their clients flexible payment options without compromising their own financial stability. This is especially useful in industries where large upfront investments are required, or where managing operational costs against delayed revenue is a struggle.
Here are some examples of the types of business that could find CCTS useful, enhancing credit control, bolstering cash flow, and improving customer retention:
Manufacturers: Manufacturers often operate on tight margins with fluctuating demand, managing inventory, machinery maintenance, and product delivery. Cash flow becomes critical when large orders requiring immediate raw material procurement arise. CCTS helps by enabling manufacturers to offer flexible payment terms to their customers, ensuring they receive full payment upfront, thus maintaining consistent cash flow and reducing the risk of bad debts.
Marketing agencies: Marketing agencies, handling project-based contracts, often juggle multiple campaigns and client demands, requiring investment in freelancers, tools, and media buys. Cash flow becomes a challenge, especially with client payments on net-45 terms or later, leading to a gap in funding for operational costs. CCTS can mitigate this by providing the full payment upfront, enabling agencies to manage operational costs effectively without the wait, thus maintaining smooth campaign execution and client relations
Law firms: Law firms, providing a range of legal services, often operate on retainer agreements or billable hours. Payments can be delayed until the conclusion of lengthy legal proceedings, posing challenges in managing operational costs, research tools, and staff salaries. CCTS can alleviate these pressures by ensuring full payment is received upfront, allowing law firms to manage both operational and case-related costs effectively without the wait, thus maintaining financial stability and focus on case quality
Accountancy firms: Accountancy firms, offering diverse financial services such as bookkeeping, auditing, tax preparation, and consulting, often operate on retainer or project-specific contracts. They face challenges in managing operational costs and investing in advanced software while waiting for client payments. A typical scenario is auditing a large corporation, requiring specialized software, extra staff, and significant operational expenditure, with payments terms extending to net-60 days post-audit, creating a cash flow gap. CCTS helps these firms by providing the full payment upfront, allowing them to manage operational and audit-related expenses effectively without the delay of client payments.
Tech companies: Tech companies, particularly startups and scale-ups, operate in a dynamic environment focused on innovation, growth, and market share capture. Despite having equity and cash reserves, they confront challenges in optimizing cash flow, extending operational runways, and maintaining competitiveness. A primary goal is achieving profitability sooner and improving Days Sales Outstanding. CCTS aids these tech companies by providing immediate payment for services rendered, thus ensuring consistent cash flow and better Days Sales Outstanding management. This support is crucial for tech companies needing to invest in R&D, recruit top talent, expand marketing, or acquire complementary technologies while maintaining a healthy cash buffer.
How it works
Customer Credit Terms Support (CCTS) streamlines the process of extending credit terms to your business customers. Here’s an overview of the typical CCTS process:
- Select Your Customer and Conduct Credit Assessment: Identify a business customer for extended credit terms and submit minimal information about them. CCTS conducts a credit assessment, which is typically fast and automated, to determine the suitable credit terms that can be offered.
- Invoice Selection, Interest Decision, and Term Options: After establishing available credit terms, you can select specific invoices to process with CCTS. This flexibility means you’re not obligated to use CCTS for all customer invoices, allowing you to choose which transactions require extended credit terms. Decide whether to absorb the CCTS interest costs or pass them onto your customer. CCTS then generates a range of term options, providing your customer with a choice of payment plans or the single option you’ve specified.
- Customer Acceptance & Immediate Payment to You: The credit terms options re sent by the CCTS provider to your customer for their acceptance. Upon agreement, you receive immediate payment, while your client benefits from extended trade credit terms.
- Payment Collection by CCTS Provider: The CCTS provider will collect payments from your customer (typically by Direct Debit). You don’t need to worry about late payments or bad debts because the CCTS provider not only collects the payments but also assumes the risk of non-payment.
The Cost
CCTS is typically free to set up and use, up until the point where flexible credit terms are offered – interest fees apply to the specific flexible credit terms chosen. As mentioned earlier, these fees can either be absorbed by your business or passed on to your customer.
Application process
The application process is typically light-touch, noting that a credit assessment is carried out on any customer you want to offer terms to through CCTS.
Click on the appl here link below and we’ll collect a small amount of initial information from you, and then respond to you within 24 hours.
Further information
Customer Credit Terms Support (CCTS) is the descriptive term we use for this type of finance solution. Although the specific product we ultimately recommend might have a similar or even the same name, in the commercial finance sector, it’s typical for different lenders to use different names for comparable products. Therefore, when reviewing this information material, the emphasis should be on the described characteristics, rather than the specific product name. It’s also worth noting that the product we ultimately recommend won’t necessarily align with all of the characteristics discussed within this information material, as our aim is to review all of your requirements and then present options that provide the best overall balanced solution.
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Yes, we charge a transparent and fair fee of 0.5% that's typically payable at the end when the loan completes, and in our opinion borrowers should be extra cautious if a broker ever offers to work without charging fee. In these circumstances the broker's income may be based solely on commissions paid by lenders, and commissions vary significantly between different lenders, so the borrower needs to be confident that the broker is not inappropriately influenced by lender commissions. It is critically important that the broker has the borrowers best interests front & centre when presenting choices and making recommendations. Our fee is modest, and if you take a look at what it represents as a portion of borrowing costs over the loan term, you'll see why we're confident it will be far outweighed by the savings we achieve for borrowers and the value of the close support and guidance we provide.
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CCTS (Customer Credit Terms Support) is a service that helps businesses offer flexible credit terms to their customers.
Customer Credit Terms Support (CCTS) is the descriptive term we use for this type of finance solution. Although the specific product we ultimately recommend might have a similar or even the same name, in the commercial finance sector, it's typical for different lenders to use different names for comparable products. Therefore, when reviewing this information material, the emphasis should be on the described characteristics, rather than the specific product name. It's also worth noting that the product we ultimately recommend won't necessarily align with all of the characteristics discussed within this information material, as our aim is to review all of your requirements and then present options that provide the best overall balanced solution.
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