Author: Darren Tredgold, General Manager, Independent Steel Company
Steel distributors operate in a constant squeeze. Suppliers want payment upfront or on short terms. Customers expect Net-60 or Net-90. Meanwhile, the distributor carries the gap on their own balance sheet, tying up working capital that could fund growth, new branches, or better inventory.
That squeeze is loosening. Financial technology built for B2B supply chains is giving regional distributors tools that were previously only available to large corporates. If you run a distribution business with 20 to 50 staff, these trends will reshape how you manage cash, payments, and supplier relationships over the next few years.
Supply Chain Finance Is No Longer Just for the Big End of Town
Supply chain finance used to require a major bank relationship and enterprise-level transaction volumes. Fintech platforms have changed that equation entirely. Over 60% of new supply chain finance adopters in 2023 were SMEs, driven by digital onboarding that replaces the cumbersome bank-led processes that historically locked smaller businesses out.
Reverse factoring is the most directly valuable instrument for distributors. Here’s how it works: your large construction company customer initiates the financing. A funder pays you early at a slight discount, and the construction company pays the funder at the original due date. You get cash faster, the buyer extends their payment terms, and credit risk is assessed based on the buyer’s creditworthiness rather than yours.
Platforms like C2FO run a marketplace where suppliers can request early payment on approved invoices. Taulia integrates directly into SAP ecosystems with AI-driven analytics. PrimeRevenue operates as a major global platform connecting suppliers, buyers, and funders. In India, the Trade Receivable Discounting System processes over $2 billion monthly in MSME financing, showing what’s possible when technology democratises access to supply chain finance.
For a regional steel distributor, reverse factoring means offering customers competitive 60 to 90-day terms without personally carrying that receivable for months.
B2B Buy Now, Pay Later Is Digitising Trade Credit
Consumer BNPL from Afterpay and Klarna gets the attention. Yet B2B BNPL is growing far faster and solving a problem distributors deal with every day: managing trade credit risk.
The mechanics are straightforward. A BNPL provider pays you immediately when your customer places an order. Your customer then repays the provider in 30, 60, or 90 days. Credit decisions happen in under two seconds, and the risk transfers off your books entirely.
B2B BNPL revenues hit approximately $14 billion in 2023 with 106% year-over-year growth. Two (formerly Tillit) out of Oslo explicitly targets construction and wholesale verticals. Billie in Berlin serves over 500,000 business customers across 3,500+ online stores. Hokodo in London provides pan-European coverage backed by Lloyd’s of London underwriting.
Offering B2B BNPL can increase merchant conversion rates by up to 40%. For a distributor, that translates into winning orders from new customers who might otherwise go to a competitor offering better payment flexibility. It also eliminates the internal overhead of running credit checks, chasing overdue accounts, and writing off bad debts.
Cross-Border Payments Are Getting Dramatically Cheaper
Any distributor sourcing steel, fittings, or equipment internationally knows the pain of cross-border payments. Traditional bank wires cost 2 to 7% in total when you add fees, foreign exchange spreads, and intermediary charges. On a $500,000 steel shipment, that’s $10,000 to $35,000 in transaction costs alone.
Fintech alternatives have slashed those costs to 0.5 to 2%. Wise processed $185.2 billion in cross-border volume in FY2025, using the mid-market exchange rate with transparent fees. Airwallex serves 150,000+ businesses globally with multi-currency accounts in over 60 countries, where roughly 90% of transfers arrive same-day.
Both platforms offer forward contracts for FX hedging. When you lock in a price on a large shipment weeks before payment is due, a forward contract protects against adverse currency movements. Multi-currency accounts also let you hold CNY, INR, or TRY locally and time conversions for the best rate.
One documented case showed savings of $36,000 per year simply by switching from PayPal to Airwallex and Wise. For a regional distributor with regular international purchasing, the savings compound quickly.
AI Is Automating the Financial Back Office
Reconciling hundreds of invoices, tracking payment terms across dozens of customers, and forecasting cash across cyclical demand patterns eats time that distribution business owners don’t have.
Xero’s AI agent JAX now handles bank reconciliation, invoicing, payment reminders, and cash flow projections, with 73% of Xero customers already using these features. QuickBooks has launched comparable AI-powered accounting tools. Both platforms cost a fraction of hiring additional finance staff.
Dedicated cash flow forecasting is particularly valuable for distributors facing cyclical demand. AI-driven demand forecasting can anticipate seasonal swings and optimise purchasing timing. Tools like Agicap connect inventory budgets to company-level cash flow, helping distributors see their true cash position across multiple product lines and customer segments in real time.
Where to Start
Three moves deliver the fastest return. First, evaluate whether reverse factoring or B2B BNPL can shift receivables risk off your balance sheet. Second, compare your current international payment costs against Wise or Airwallex, because the savings on even a handful of shipments will likely justify the switch. Third, trial AI-powered reconciliation through your existing accounting platform before investing in standalone tools.
The distribution sector has operated on handshake credit terms and manual invoicing for decades. Fintech is replacing those processes with faster, cheaper, and more transparent alternatives. Regional distributors that adopt early will free up working capital and compete more effectively against larger national players.