Factoring company AeroFund International has launched a new division that offers businesses with virtual procurement cards, the company said this week.
AeroFund has formed AeroPay Express, a unit that provides virtual procurement cards that act as a line of credit to business payers, as well as vendor management services. Vendors pay a fee to accept the virtual card payment.
The company offers extended credit terms for up to $10 million and is linked to an accounts payable (AP) solution, which integrates with existing AP tools to help procurement departments pay invoices.
While AeroFund officially revealed the formation of the new unit this week, AeroPay Express has been in operation for some time. Last month, the company announced the launch of a $50,000 line of credit designed specifically for businesses affected by recent natural disasters in the U.S., including hurricanes and fires. The line of credit provides businesses with a way to make payments to their suppliers via virtual procurement card as they work to restart and rebuild operations.
“We know that many of the hotels in these [ravaged] areas, for example, will require immediate cash to get back to business,” said CEO Stephen Troy at the time. “Some affected hotels may need to pay for equipment, inventory, contractors, plumbers, electricians, carpet cleaners and more. We understand that vendors need to get paid and may be willing to provide a discount for early payment. We’ll get that done by providing immediate cash and pass along the savings.”
The B2B payments industry has propelled adoption of virtual card technology, especially in the area of corporate travel. Accounts payable departments, however, continue to rely mostly on paper checks and ACH to pay suppliers, which has led to some FinTechs working to promote use of virtual cards for procurement and supplier payments.
“We understand that virtual cards are not suitable for every payment or every supplier,” said EML Payments Vice President of Marketing and Sales Support Michelle Young in a recent interview with PYMNTS. “However, the fact that each year we see more and more merchants accepting credit cards on the whole makes us wonder, ‘Why aren’t companies looking into virtual cards as an option?’”