American Express takes on supply chain finance bottlenecks with EarlyPay

Source: American Express

American Express (NYSE:AXP) is announcing the initial launch of Early Pay, a supply chain finance and dynamic discounting solution, as the newest addition to its suite of business financing options.

Eligible large U.S. companies who buy goods and services from U.S.-based suppliers can leverage the solution as a way to increase cash flow, generate working capital, and make their supplier payment process more efficient. In turn, suppliers can access the easy-to-use digital platform to have their eligible invoices paid earlier than their original payment due date at a competitively-priced early payment discount.

“Access to money and improving efficiency are crucial for the growth of both corporations and the companies they work with,” said Gina Taylor Cotter, Senior Vice President and General Manager, Global Commercial Financing at American Express. “The genesis of Early Pay actually began within the walls of American Express. We originally developed a service to use with our own suppliers in 2016, and its quick adoption and success led us to develop the Early Pay solution for external clients. Now companies can leverage their accounts payables to reduce costs of goods and services while offering automatic, flexible payment terms to their eligible suppliers.”

Unique funding options for buyers

Early Pay does not charge implementation fees, setup fees, or ongoing maintenance charges for buyers who sign up. Additionally, Early Pay enables buyers to choose how they want to fund early payments to suppliers during implementation:

American Express Funded: American Express can fund the discounted early payments to suppliers on the buyer’s behalf, allowing buyers to maintain their payment terms, increase cash flow, meet working capital needs and reduce the costs of goods and services sold. Buyers pay American Express back on the original payment date.
Self-Funded: Alternatively, buyers can choose to self-fund the discounted early payments to suppliers, allowing buyers the ability to capitalize on discounts to reduce the costs of goods and services sold.

Simple, digital early payment options for suppliers

Many suppliers are small and mid-sized firms, and access to working capital is often critical to their ability to run and grow their businesses. Early Pay provides a simple, digital solution allowing the supplier to select offers from American Express on when they want to be paid in exchange for a discount, which aims to reflect a lower cost than if they were to go to borrow from their bank and can help improve their cash flow. On the early payment date selected by the supplier, payment is made via ACH or wire transfer to the supplier’s bank account by American Express or the buyer, in accordance with the buyer’s instructions. The solution does not require suppliers to complete lengthy onboarding, sign difficult paperwork, or pay an enrollment fee, and the supplier is not required to be an American Express Card-accepting merchant.

The Growing Suite of American Express Business Financing Options

In addition to a wide range of credit and charge cards, American Express offers several short-term flexible financing products that can meet the many, unique needs of our business customers:

Merchant Financing, launched in 2011, is available to qualified American Express Card-accepting merchants1. Loans are offered in six-month, one- and two-year terms and are designed to fund large projects such as expanding to new locations or major building renovations. Loans range from $5,000 to $2 million and offer flat, fixed fees. Merchants can repay automatically from their credit and debit card receivables or business bank account, making it easy and hassle-free. More information can be found here.

In October 2018, Merchant Financing will launch a new streamlined application for American Express Card-accepting merchants who are also eligible Business Card Members, with preapproved offers of loans up to $250,000. The application is 100% digital and most applicants are approved within minutes, with funding arriving as soon as the next business day.

Working Capital Terms offers short term financing to pay vendor invoices designed to help small businesses manage cash flow2. First launched in 2016, this product provides low cost, commercial financing to eligible American Express Business Card Members with direct payment to vendors. Terms are offered at 30, 60, and 90 days with access to loans ranging from $1,000 - $250,000. More information can be found here.

Business Loans helps businesses with access to working capital and short-term financing and became available to pre-approved American Express Business Card Members last year2. Business Loans offer eligible Business Card Members quick access to unsecured loans up to $50,000, to grow their business or to consolidate debt. Businesses can apply for the loans through a simple online process and receive a decision within minutes. More information can be found here.

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