Payment extension is a supply chain finance solution that allows a buyer to artificially extend their payment terms beyond the original maturity date of the invoice, subject to funder approval. It typically works similar to a standard payables finance programme. At extended maturity, the buyer repays the funder who provided suppliers with finance.
The key difference from a standard payable finance programme lies within the buyer paying the funder an additional interest fee for financing their payment term extension. Payment extension can be paired with Dynamic Discounting to take advantage of higher early payment discounts offered by suppliers or be entirely buyer driven with no changes to suppliers payment terms.