An Internet-based service called FTRANS allows b-to-b entrepreneurs to "outsource their accounts receivable system, the same way a retailer outsources their credit system to the bank credit card," according to John Hayes, the serial entrepreneur behind the venture. For a transaction cost of about 2%, sellers get almost immediate payment from a bank, which also covers any buyer default. "Because we're causing invoices to be paid within a few days instead of 40 or 60 days, it dramatically lowers the amount of capital" needed by entrepreneurs, Hayes says.

Related Summaries