Net-30/60/90 Isn’t “Standard”—It’s a Loan You’re Giving Clients

Think net-60 is just "how business works"? You're actually financing your clients' operations interest-free while your own cash sits locked up. Here's how to stop being an unpaid bank and structure payment terms that protect your business—or get the capital you need to bridge the gap.

---

There is nothing worse than finishing a $40,000 job, knowing you did great work, and then hearing the client say, "We're on net-60 terms."

You smile. You nod. You act like it's no big deal.

But inside, you are doing the math.

You have payroll in two weeks.

Material suppliers want their money in 30 days.

Your equipment payment is due next month.

And now you are supposed to wait two full months to get paid for work you already completed?

That is not "how business works."

That is you becoming an unpaid bank for your client.

And the worst part?

Most business owners think they have no choice.

They think net-60 is just the cost of doing business with bigger clients.

They think if they push back, they will lose the deal.

But here is the truth:

Extended payment terms are a financial product you are offering for free.

And if you are not pricing that product correctly—or finding a way to get paid faster—you are slowly suffocating your own cash flow.

---

Why Banks Do Not Care About Your Invoice Timing Problem

Let us say you are a general contractor.

You just landed a $75,000 commercial project.

The client is solid. The contract is signed.

But they are on net-90 terms, and you need to buy materials and pay subs now.

You walk into your local bank and explain the situation.

You show them the signed contract.

You show them your revenue history.

You have been in business for seven years.

You have never missed a payment.

The loan officer nods politely. Then she asks for:

• Two years of tax returns

• A personal credit score over 680

• Collateral to secure the loan

• A 45-day underwriting process

By the time the bank approves your loan (if they approve it at all), the job is halfway done, and you have already maxed out your credit cards just to keep things moving.

Banks are not built to solve invoice timing problems. 

They are built to lend money to people who do not urgently need it.

They want perfect credit, perfect collateral, and perfect patience.

You do not have any of those things.

You have a signed contract and a cash flow gap that needs to close this week.

That is where revenue-based funding comes in.

---

The Real Cost of Extended Payment Terms

Before we talk about solutions, let us talk about what net-60 or net-90 terms are actually costing you.

You Are Financing Your Client's Operations

When you agree to net-60 terms, you are essentially saying: "I will buy all the materials, pay my crew, cover my overhead, and wait two months for you to pay me back."

That is a loan. And if a bank did that for you, they would charge you interest.

But you are doing it for free.

Your Cash Is Locked Up

Every dollar sitting in an unpaid invoice is a dollar you cannot use to:

• Buy materials for the next job

• Pay your crew on time

• Invest in new equipment

• Cover unexpected expenses

You are literally financing your client's business while your own business is starving for cash.

You Are Taking on All the Risk

What happens if your client pays late? What if they dispute the invoice? What if they go out of business before they pay you?

You are the one left holding the bag. You already paid your subs. You already bought the materials. And now you are chasing down a client who may or may not ever pay you.

---

How to Stop Being an Unpaid Bank

Here is the good news: You do not have to accept extended payment terms as a fact of life.

You have options.

1. Price Your Payment Terms Into the Job

If a client wants net-60 terms, that is fine. But they should pay for that privilege.

Here is how to think about it: If you were going to borrow $50,000 from a lender to cover the cost of a job while you wait to get paid, what would that cost you?

Let us say it would cost you 2% in fees or interest.

That means you should be adding at least 2% to your invoice if the client wants extended terms.

Example:

• Net-15 payment: $50,000

• Net-60 payment: $51,000

• Net-90 payment: $51,500

You are not being greedy.

You are pricing in the cost of carrying that job for 60 or 90 days.

Most clients will not even blink at a 2-3% upcharge.

And the ones who do? They are probably not the clients you want anyway.

2. Offer a Discount for Early Payment

Flip the script. Instead of charging more for extended terms, offer a discount for fast payment.

Example:

• Net-60 payment: $50,000

• Paid within 10 days: $48,500 (3% discount)

This does two things:

• It incentivizes clients to pay you faster

• It gives you more control over your cash flow

Some clients will take the discount. Some will not.

Either way, you win.

3. Require a Deposit Before Starting Work

This is non-negotiable for most smart contractors. If you are doing a $100,000 job, you should be collecting at least 30-50% upfront before you buy a single thing.

That deposit does two things:

• It covers your material costs so you are not out of pocket

• It proves the client is serious and has the cash to pay you

If a client pushes back on a deposit, that is a red flag. Walk away.

4. Use Progress Billing

Instead of waiting until the end of the job to invoice, break the job into milestones and invoice as you go.

Example (for a $100,000 job):

• 30% deposit: $30,000 (before work starts)

• 30% at rough-in: $30,000

• 30% at substantial completion: $30,000

• 10% final payment: $10,000 (net-15 after final walkthrough)

This way, you are never more than 30-40 days out from getting paid, and you are not sitting on a massive unpaid invoice at the end.

5. Get Funded While You Wait

Let us be honest: Sometimes you cannot negotiate better terms. The client has all the leverage, and if you want the job, you have to accept net-60 or net-90.

That is where revenue-based funding comes in.

Instead of waiting 60 days to get paid, you can get funded in 24 hours based on your existing revenue and contracts.

No hard credit pull.

No collateral.

No waiting for the bank to "think about it."

You submit your revenue docs.

You get approved.

You get the cash you need to keep moving.

And when your client finally pays you in 60 days?

You are already three jobs ahead, and your cash flow never skipped a beat.

---

The "Meet or Beat" Guarantee

Here is the thing: Most business owners think alternative funding is expensive.

And yeah, some of it is.

But here is what most people do not know:

We will meet or beat any competitor's rate—or we will pay you $500.

That means if you find a better deal somewhere else, we will either match it or cut you a check for $500 just for trying.

Why?

Because we know our rates are competitive. And we know that speed and flexibility are worth paying for when your cash is tied up in unpaid invoices.

---

FAQs

What does net-30, net-60, or net-90 payment terms mean?

Net-30, net-60, and net-90 are invoice payment terms that specify when a client must pay you after receiving your invoice. Net-30 means payment is due in 30 days, net-60 means 60 days, and net-90 means 90 days. While often presented as "standard business practice," these terms effectively mean you're financing your client's operations interest-free while waiting to get paid for completed work.

Are extended payment terms like net-60 really industry standard?

No. Extended payment terms are not universal industry standards—they're negotiable terms that larger companies often impose on smaller vendors. While common in certain industries like government contracting or large corporate procurement, accepting net-60 or net-90 terms means you're choosing to provide free financing to your clients. Many successful businesses negotiate shorter terms, require deposits, or charge premium pricing for extended terms.

How do extended payment terms affect my cash flow?

Extended payment terms create a cash flow gap between when you pay for labor, materials, and overhead versus when you receive payment. If you complete a $50,000 project on net-60 terms, you might spend $35,000 in the first 30 days on expenses while waiting another 30-60 days to get paid. This gap forces you to either have substantial cash reserves, use credit cards, or find alternative funding to bridge the difference.

Can I charge clients more for accepting net-60 or net-90 terms?

Yes. You can structure your pricing to reflect the cost of extended payment terms. Many businesses offer a discount for immediate payment (net-10 or net-15) and charge their full rate for net-60 or net-90. Some add a premium for extended terms. This approach acknowledges that waiting longer for payment has a real cost to your business and shifts that cost to the client who's benefiting from the delayed payment.

What is the difference between invoice factoring and revenue-based funding?

Invoice factoring involves selling your unpaid invoices to a third party at a discount (typically 70-90% of face value) to get immediate cash. Revenue-based funding provides capital based on your business's revenue performance without requiring you to sell individual invoices. Revenue-based funding often offers more flexibility, doesn't require you to discount invoices, and can be structured around your actual cash flow patterns rather than individual invoice timing.

How can I negotiate better payment terms with clients?

Start by offering early payment discounts (like 2% off for payment within 10 days), require deposits on larger projects (25-50% upfront), or structure milestone payments throughout the project. For existing clients on extended terms, frame the conversation around mutual benefit—explain your costs and offer a slight discount for faster payment. For new clients, present your preferred terms confidently before negotiating, rather than accepting their terms by default.

What funding options help bridge the gap while waiting for invoice payments?

Revenue-based funding, invoice factoring, business lines of credit, and short-term business loans can all help bridge cash flow gaps. Revenue-based funding is particularly suited for businesses with consistent revenue but invoice timing issues because it provides capital based on your business performance rather than traditional credit requirements. Unlike bank loans, these options typically fund quickly (often within days) without lengthy underwriting.

Do banks offer loans specifically for invoice payment delays?

Traditional banks rarely offer products designed specifically for invoice timing gaps. Bank loans typically require strong credit, collateral, lengthy approval processes, and don't align with the urgent, short-term nature of cash flow gaps. This is why many businesses turn to alternative lenders, invoice factoring companies, or revenue-based funding providers who understand operational cash flow needs and can fund quickly without traditional banking requirements.

---

Final Word: Stop Financing Other People's Businesses

Net-60 is not "standard." Net-90 is not "how things are done."

Those are terms you agreed to—and you can change them.

You can price your payment terms.

You can require deposits.

You can use progress billing.

Or you can get funded in 24 hours and stop waiting for clients to pay you.

But what you cannot do is keep pretending that extended payment terms are not costing you money.

Because they are.

Every single day.

Stop being an unpaid bank. Start getting paid like the professional you are.