Welcome to our newsletter! Running a business means figuring out how to grow without draining your cash flow. I’ve learned over the years that negotiating good payment terms and using credit the right way can give you the breathing room to scale without stressing your finances. Here’s a real-life example of how this strategy works for me—and it might help you too.
Negotiating Payment Terms to Keep Cash in Your Pocket
A few years back, I negotiated a new arrangement with my dumpster manufacturer. They’re located about 90 minutes from my headquarters, so after buying a few dumpsters outright, I sat down with them and shared my growth goals. I let them know I’d need a lot more dumpsters over time, and instead of focusing on discounts, I asked if we could structure payment terms in a way that didn’t require me to pay upfront.
Here’s the deal we came to:
They agreed to build the dumpsters for me without an upfront payment. Instead, I’d pay each time I came to pick one up. Even on a big order—say 15 dumpsters at $75,000 total—I didn’t need to lay down a big deposit or full payment in advance. I could just pay per dumpster as I picked each one up. For a small business, this was incredibly helpful because it let me finance my growth without tying up cash. Every dollar I didn’t have to pay upfront was cash I could put to work elsewhere in the business.
Maximizing Credit Card Terms for Extra Time
With these terms set up, I went a step further by paying with a credit card that offered 2% cashback. Each time I picked up a dumpster, I earned $100 back in cashback—and got a 30-day grace period before I had to pay the bill. But here’s the kicker: by timing my purchase just after the billing period closed, I could stretch that to 60 days before I actually needed to pay anything.
Let’s say my billing cycle ends on the 28th, and I pick up a dumpster on the 29th. Now, I don’t owe anything on that purchase for another 60 days. During that time, I can rent out the dumpster multiple times and start bringing in revenue.
The Numbers in Real Life
If it’s your busy season, this approach really works in your favor. Say you have 60 days, which is about 8–9 weeks. If you rent that dumpster out once a week, that’s eight rentals before you even have to pay for it. With a net profit of about $200 per rental, you’d bring in $1,600 in profit before even touching your bank account to pay for the dumpster. If that dumpster costs $5,000, you now only need to cover $3,400 out of pocket—and you’re left with an asset that keeps generating income.
Using Balance Transfers to Stretch Your Cash Flow
Here’s another tip: if your credit is solid, credit card companies will often offer balance transfers with low interest rates. Depending on the national interest rate, you might get a deal like 3% for 12 months. So if you have $10,000 in purchases, you could pay just $300 in interest to transfer that balance to another card, with no interest payments for another 12 months.
If you first purchase a dumpster on a 2% cashback card, then transfer that balance at 3%, you’re only paying 1% on the balance—just $100 on a $10,000 purchase—and giving yourself another 12 months to pay it off. This approach lets you keep more money in the bank while putting the dumpster to work generating income.
Why Credit Matters
The only way these strategies work is if you keep your credit in good shape. Good credit doesn’t just make it easier to get financing; it also opens up options like balance transfers, cashback offers, and extended payment cycles. For a small business owner, this can be a serious advantage.
Take This and Run with It
Look at your own business and think about where this approach might work for you. Are there suppliers you could negotiate terms with? Could you use credit strategically to keep cash in the business longer? Sometimes, the smallest adjustments in how you manage payments can make a big difference in your cash flow.
Got any questions or ideas? Hit reply—I’d love to chat and see if this strategy could work for you, too. Small adjustments like these can help make growth easier on your wallet and your business.✌️
Justin Hubbard
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