Does B2B BNPL Improve Credit Score?

B2B BNPL (Buy Now, Pay Later) has unlocked tremendous growth potential for small businesses in India. The MSME sector has always struggled to get formal credit from banks. But increasing internet penetration into the semi-rural areas has opened up new opportunities for this sector.

The rise of fintech service providers and alternative payment options like BNPL has also improved the chances of success for smaller businesses. Moreover, business owners can build their credit scores with BNPL while using the facility for their daily operations.

KredX offers Pay Later financing solutions to distributors, dealers and retailers, helping businesses reach their full potential.

How Does B2B BNPL Work?

B2B BNPL is a short-term financing option offered to businesses at point-of-sale. The underlying concept of this financing model is that buyers receive the product, and B2B sellers receive the money instantly from the service provider.

Let us look at how B2B BNPL works:

  • Step 1: The business buyer selects the BNPL option at checkout.
  • Step 2: Seller ships the product after due processing.
  • Step 3: A third-party BNPL service provider pays the total amount to the seller after receiving invoices.
  • Step 4: Buyer repays the amount to the fintech service provider at his convenience.

It must be noted that a buyer can split the amount and choose a repayment tenure. Both these features have contributed to the popularity of B2B BNPL.

How Does BNPL Affect Credit Scores?

Users have often wondered about this alternative payment option’s impact on credit scores. Given below are crucial points regarding the relationship between BNPL and credit scores:

  • Borrowers need to assure the BNPL service provider that they can repay the amount in time. This will help them quickly build a good credit score.
  • Every loan has different terms and conditions. How businesses make purchases and repay the amount will determine their credit scores.
  • Maintaining a minimum amount of total outstanding debt and making regular repayments will allow a business owner to maintain a good credit score.
  • BNPL service providers leverage cutting-edge technology to assess a new-to-credit buyer's creditworthiness.
  • It is easy to obtain BNPL approvals. However, if the business fails to repay the amount in time, it will have a negative impact on its credit score.

Benefits of BNPL for New Businesses

Listed below are key benefits of BNPL for smaller businesses and startups:

  • BNPL is an effective financing option that removes the uncertainties of meeting the eligibility criteria for availing formal credit. As a result, new-to-credit business owners can easily acquire products and services for their operation and development.
  • BNPL is convenient and easy. There is no hassle of undergoing a lengthy documentation process.
  • The ability to spread payments at their convenience without straining their budget is a significant benefit for new businesses.
  • An added advantage is that BNPL builds stronger relationships. Businesses tend to purchase more from the same seller if they find the process easy and smooth. As a result, the seller's AOV (Average Order Value) increases.

KredX is actively helping SMEs achieve financial inclusion in India with its Pay Later service. In addition to being a driver of growth for SMEs, Pay Later has also boosted the sales and revenue of suppliers and merchants offering this facility.

Bottom Line

B2B BNPL is changing the finance sector in our country. If used prudently, it can build strong credit scores for people. Though it is for time to tell whether it will grow further or not, this financing option is promoting the dreams and aspirations of smaller businesses like never before.


Financial experts consider BNPL as an instalment loan as borrowers pay back the amount in instalments.

The B2B BNPL option is an entirely digitised transaction model. Moreover, the process is hassle-free and user-friendly.