Has anyone used C2FO?

by hammerpe33. Posted on Sep 09, 2020    9    9

We are in the contract phase with a new client. They are a fortune 500 company. The terms are EOM + 90 days. The contract says "company shall apply a two (2%) discount to the invoice price if payment is made within ten (10) days of the receipt of the invoice by company. " My concern is that if they choose NOT to pay within 10 days then cash flow wise it becomes a problem for us to carry the cost for 90 days. This company is set up with C2FO. Has anyone used this service? What is it? How does it work?


itsallhoopla 1

I worked for one of the largest companies in the United States and this was quite common. Net 90 with a structured discount. It seems to happen when you need them more than they need you.

qabadai 3

Big businesses like tend to be shitty about paying on time.

I’m not familiar with C2FO but looks like a standard invoice factoring. It’s not great, but take a look at the cut they’re taking off and shop around.

Depending on how big you are, a revolving line of credit may be possible as well.

Man-of-Industry 2

C2FO does have a factoring product, but the early payment product is actually not factoring. The platform just facilitates early payments from large companies.

The gist is:

  1. You select invoices and set a discount rate you're willing to accept in exchange for early payment (offer).
  2. If your discount "offer" meets or exceeds your customer's desired rate, it will be accepted and your customer will pay those invoices early minus the discount.

    What's the rate? Well... that's kind of complicated. It sort of works like a reserve price on eBay, where a seller has a price in mind but that price isn't listed on the auction.

    All offers for a given time period are analyzed in aggregate and selected or rejected in order to meet the return rate. This means that there can be offers below, at, and above your customer's desired rate.

    Generally, C2FO ends up being cheaper than using a factor—often WAY cheaper—and you're not actually selling your invoices.

    Source: Former employee. Feel free to DM me if you have any other questions.
  hammerpe33 2

We are not big. It just depends on how much work we will be doing during the 90 days. We could float maybe $20k but thats it. So chances are that I will have to use invoice factoring. That is if they go the full 90 days. From what I understand, since they are a big company with good credit, I should get favorable terms for factoring. In addition C2FO has a whole section just about fast payment with the company that is looking to hire us. I am just learning about invoice factoring so this is all new to me.

dealbuddy 5

No but net 90 is rough.

chickensinthehouse 3

You should get more info. Often the setup is almost a bit like an auction with the company obtaining a larger discount in exchange for paying invoices quicker. The company can set an amount that it’s willing to pay early in order to have the company’s vendors “bid” a percentage discount. The winners get paid earlier.

djaaronkline 6

2% 10 Net 90?!

It’s fine if they pay within ten to thirty days, but if you aren’t a bank, you will become one.

The best terms my company offers (for us and for our customers) is 2% 10 Net 30.

If you want Net 90 terms, you are paying US an additional amount for taking 90 days to pay invoices.

UncleFishKiller 1

Fortune 500 companies do not pay points, they dictate the terms and you take it or leave it. I have one account on 120days, but once you get past the initial hurdle is dependable money. We do what we must to secure the business.

djaaronkline 1

I guess it’s good that I am prepared to leave it if the terms don’t work for me and my business.