How Chemical Companies Use Daylit to Unlock Working Capital

Executive Summary

Chemical companies operate on tight cash cycles: raw materials must be purchased up front, while customers often pay on 30–60‑day terms. To bridge this gap, distributors, manufacturers, and blenders use Daylit’s working capital products: PayLater and FundNow.

PayLater spreads supplier invoices over a short 3–6‑week plan, helping teams pre‑buy inputs, capture early‑pay discounts, and keep production on schedule. FundNow advances a large share of approved receivables, delivering cash today while companies wait for customer payments. Together, these tools keep orders moving and reduce the need for costly last‑minute financing.

The impact is a shorter Cash Conversion Cycle, fewer stock outs and expediting fees, and the ability to take on bigger, time‑sensitive orders with confidence. This case study explains how companies in the chemicals industry put these tools to work and highlights the ROI patterns seen across the cohort.

Chemical Industry Financial Pain Points

Receivable terms: Net-30 to Net-60 are common; cash can be tied up during volatile input pricing cycles.
Working capital crunch: Bulk purchases and spot buys strain liquidity.
Growth constraints: Large POs and seasonal surges require cash before receivables turn.

Daylit’s products are used to unlock cash exactly where the cycle is tightest, at the supplier invoice (bill) and receivable level.

Chemical Company Profiles

Commodity Chemical Distributor (Distributor A)
Uses PayLater for supplier invoices sized $60k–$130k. Frequently executes multiple invoices on the same origination day (batching). Typical payoff in 4–5 weeks.
Specialty Additives Manufacturer (Manufacturer B)
Uses FundNow to advance ≈85–90% of customer receivables. Short 2–4 week cycles help cover payroll and raw material purchases.
Regional Resin/Blending Company (Blender C)
Mix of PayLater (to pre-buy inputs) and occasional FundNow (to accelerate large A/R). Financing aligns to production runs and outbound shipments.

Working Capital Solutions for Chemical Companies

PayLater example

Structure: 6 weekly payments (≈45 days) tied to a supplier invoice.
Typical effective fee: ~1–2% of invoice per cycle.
Best for: pre-buying inventory, capturing supplier early-pay terms, fulfilling large POs.

FundNow example

Structure: advance ≈85–90% of a customer receivable with a small origination fee (often ~1%) and time-based cost over a few weeks.
Best for: payroll/COGS coverage while receivables age, taking larger orders without cash strain.

Operational pattern

Batching: Multiple invoices/receivables funded together when a large PO arrives.
Ticket sizes: Concentrated in $50k–$130k; smaller tickets appear for sampling or pilot runs.
Cycle time: Most deals complete within 3–6 weeks.

Outcomes for Chemical Businesses

Cash conversion acceleration: Effective DSO reduction by 30–45 days when using PayLater; immediate cash via FundNow against A/R.
Revenue enablement: Customers report the ability to accept larger orders and avoid stockouts, with 10–25% increases in shipped volume during active financing periods.
High completion rates: The vast majority of financings complete on schedule; repeat usage is common.

Return on Investment for Chemical Companies

Example A — PayLater on supplier invoice

Invoice: $80,000
PayLater fee (≈2%/45 days): $1,600
Gross margin on order (12%): $9,600
ROI on financing cost: ($9,600 − $1,600) / $1,600 = 5.0×
Payback: Immediate upon order fulfillment; financing enables taking/expanding the order.

Example B — FundNow on customer receivable

Receivable: $60,000; Advance 90% = $54,000
Costs (e.g., 1% origination + time-based): ~$1,600–$1,700 over ~3 weeks (≈2.7–2.9%).
Use of funds: cover payroll + raw materials, prevent production slowdown.
Value realized: maintain delivery schedule, avoid expedited freight/stockout penalties, keep customer satisfaction high.
Implied ROI: Cost < incremental gross margin preserved + operating penalties avoided (often several thousand dollars), resulting in multi‑× ROI.

When To Use Which Working Capital Product for Chemical Companies

Choose PayLater when: you need to pre-buy inputs or access supplier early-pay discounts to improve landed cost and margin.
Choose FundNow when: you need cash against A/R to bridge to customer payment, especially during growth surges.
Combine when: a large PO creates both an upfront inventory need and a receivable gap—batch PayLater for inputs, then FundNow on the outbound invoice.

Best Working Capital Practices for Chemical Businesses

Align cycles: Set PayLater schedules to overlap expected customer cash receipts.
Batch intelligently: Group invoices/receivables by PO or ship window to reduce admin overhead.
Protect margins: Use financing to capture early-pay discounts and to buy at favorable price points.
Monitor KPIs: advance rate, fee rate, cycle time, repeat usage, late payments, and utilization vs. demand.

‍Conclusion

Across the chemicals cohort, the pattern is consistent: invoice‑tied financing at the point of need delivers reliable, repeatable cash‑conversion gains. Using PayLater on the payables side and FundNow on the receivables side shortens the cash cycle by weeks, protects margin via early‑pay discounts and strategic buys, and frees capacity to take larger or urgent orders.