Commercial payment terms can leave suppliers financing their customers. Information supplied by Lulapay illustrates how third-party funding changes the timing of payment, who bears the financing cost and where repayment risk sits.
A sale can generate revenue before it generates cash. For a supplier that must pay for stock, labour and transport before collecting an invoice, that difference matters.
Agreed payment terms of 30, 60 or 90 days create a financing interval between supplying a customer and receiving payment. If the customer then pays late, the interval becomes longer and less predictable.
“When a supplier delivers goods or services today but agrees to receive payment in 30, 60 or 90 days, it is extending credit,” says Jordan Gosling, Vice President of Lulapay.
The practical question is who funds that interval—and whether the eventual sale leaves enough margin to cover its cost.
Establish when the payment clock starts
“Thirty days” is incomplete without an agreed starting point. A commercial arrangement might measure the period from the invoice date, receipt of a valid invoice, delivery, acceptance or a monthly statement.
A supplier should therefore connect the payment term to a specific event and understand what the customer requires before processing payment. Missing purchase-order references, disputed quantities or incomplete delivery records can create further delays.
Agreed credit and overdue payment also need to be distinguished. A customer paying on day 60 under agreed 60-day terms is using the credit period provided. A customer paying on day 60 against a 30-day obligation is paying late.
Both situations require working capital, but they present different collection and relationship-management problems.
Follow the cash through the transaction
Lulapay is Lula’s business-to-business trade-credit product. Under the model described by the company, an approved buyer uses a facility to pay a supplier, then repays Lulapay over an agreed period.
The supplier receives payment from Lulapay on the buyer’s behalf. The buyer’s repayment obligation is to the funding provider.
That structure changes who finances the transaction. It does not remove the financing cost or guarantee that the buyer’s own customers will pay on schedule.
According to Gosling, suppliers are typically paid in full before releasing stock. Availability still depends on the buyer’s approval, facility and acceptance of the applicable terms.
Who pays for the extra time?
In the examples supplied to AfricaBusiness.com, Lulapay described a flat monthly charge of 2% on the original amount drawn down.
The company confirmed that its R40,000 construction example carried a total cost of R2,400 for approximately three months, including where repayments were made in monthly instalments.
The calculation is:
R40,000 × 2% × 3 months = R2,400
Total principal and financing cost would therefore be R42,400 over the agreed schedule.
This is a charge on the original amount, rather than a rate applied only to the declining outstanding balance. A business comparing funding options needs the actual repayment dates and amounts as well as the headline monthly percentage.
Lulapay said the quoted pricing included all applicable fees and taxes for the arrangements described. Specific quotations, supplier-supported offers and introductory periods may differ, so these examples should not be read as universal pricing.
Three examples show different allocations of cost
The company supplied three anonymised transactions. They illustrate the mechanism, but have not been independently verified as customer case studies.
| Sector | Approximate invoice value | Approximate term | Financing cost | Who paid the cost |
|---|---|---|---|---|
| Renewable energy | R800,000 | 30 days | R16,000 | Supplier |
| Construction | R40,000 | 90 days | R2,400 | Buyer |
| ICT | R290,000 | 30 days | R5,800 | Buyer |
In the renewable-energy example, the buyer’s customer released payment once stock reached the site. Lulapay paid the supplier, enabling delivery, while the supplier absorbed the R16,000 financing cost.
For that supplier, the commercial assessment includes whether the sale’s margin justifies paying for the customer’s credit period.
In construction, the company said the buyer received project payments at milestones several weeks apart. Funding allowed the supplier to receive payment upfront while the buyer repaid in instalments.
The relevant test for the buyer is whether those repayment dates remain manageable if a milestone payment arrives later than expected.
In ICT, the company described a buyer whose customers paid slowly while its own supplier required payment to maintain services. Funding helped bridge that timing gap. Continued use would still require the business to assess whether its underlying customer-payment cycle is sustainable.
Payment protection has a defined scope
Lulapay told AfricaBusiness.com that its facility agreement is with the buyer and that it has no claim against the supplier if the buyer fails to repay.
The company also said delivery, returns and quality remain commercial matters between supplier and buyer. Those responsibilities should not be confused with the buyer’s repayment default.
This description is based on the company’s written explanation. AfricaBusiness.com was not provided with the underlying facility agreement for independent contractual review.
Businesses considering an arrangement should obtain the applicable documents and understand their responsibilities, including how disputes and supplier-funded charges are handled.
What the figures establish—and what they do not
In its October 2026 responses, Lulapay reported almost R1 billion disbursed since March 2022 across 600 unique SMEs.
It also said approximately 70% of buyers had returned for further funding after their original transaction, measured across the product’s history.
These are company-supplied figures. Repeat use indicates continued demand, but does not establish affordability, customer profitability or repayment performance.
The company declined to disclose arrears and default data. It also said it does not directly measure how many sales would otherwise have been delayed or lost.
Its reported typical transaction range of R100,000–R250,000 should therefore be understood as a range, rather than a disclosed statistical average or median.
Check the repayment schedule before committing
Lulapay said early settlement carries no penalty and that future financing charges are waived when a buyer settles early.
The amount saved depends on the specific schedule and settlement date. A buyer should obtain a dated settlement quotation and understand how charges already incurred are treated.
Before accepting funding, the useful comparison is between the expected trading benefit and the complete cash commitment: principal, charges, repayment dates and the consequences of slower customer receipts.
For suppliers, faster payment can improve certainty. For buyers, additional time can make a purchase possible. The arrangement works commercially only when the cost and repayment obligations fit the transaction.
Reporting is based on written responses and clarifications supplied by Lulapay in October 2026. Company figures and anonymised examples have not been independently audited. This feature examines the payment mechanism and does not recommend a particular funding provider.