A “buy now, pay later” (BNPL) business lets customers purchase goods or services immediately but pay for them in installments over time—often with little or no interest if payments are made on schedule. This Excel modeling template focuses on the specific assumption related to such a business for accurate bottom-up projections.
After purchase, the template will be immediately available to download. This is also included in the SaaS, Industry-specific, and Lending Business financial model bundles.
Essentially, the BNPL company covers the purchase cost upfront, then collects repayment in smaller, scheduled installments from the buyer. This creates a lot of relevant business levers that can be pulled and will dramatically impact the initial startup financing requirements, cash flows, and potential returns.
Template Features:
- Model up to 60 months.
- Onboard up to 3 types of merchants.
- Credit facility module.
- 3-statement model (Income Statement, Balance Sheet, Cash Flow Statement) (monthly and annual)
- DCF Analysis, IRR, NPV, and Equity Multiple.
- Cap table with dynamic inputs and output summaries for investors / operators.
- Lots of visualizations.
- Fully editable and unlocked Excel document.
Revenue Assumptions (inputs for each of the 3 merchant type)
- Merchants onboarded per month.
- Avg. Annual Sales/Merchant
- Average Annual Growth
- Average Order Value
- Average Annual Growth of Order Value
- Merchant Fee (main revenue)
- Fee/Txn
- BNPL Penetration Rate
- Average Monthly Increase
- Stabilized Penetration Rate
- Avg. Late Payment Rate
- Late Payment Fee
- % Who Are Late and Default (no fees collected)
- % of Customers Who Don't Pay in Full on Time
- Penalty Rate Charged (represents total accrued interest)
- Month Delay to Collect Promotional Interest
- % of Customers That Stop Paying (adjustable per year)
- Typical Month # Defaulter Stops Paying
- Net % of Defaults Recovered
- Months to Recover
- Average Term (installment payments)
- % Paid Up Front
- % Paid in Installments
- Per Month Amount
- Volume-based Fee
- Per-Transaction Fee
- Credit / Risk Assessment Check
- Regulatory / Compliance Fees
- Direct linkage to revenue: The interest cost is incurred specifically to fund the customer’s purchase—hence it is a cost required to produce the sale.
- Core component of the BNPL offering: Without this borrowed capital, the BNPL transaction could not occur, so the associated interest is seen as a fundamental cost of generating that revenue stream.
- Industry norm: In lending or finance-driven businesses, the cost of funds is frequently included in cost of revenue to show the “true” margin after subtracting funding expenses.
For the initial startup costs required to build the software, there is a buildout schedule that lets the user define up to 15 high-level cost categories for software development plus a contingency amount. Then, the user can define the percentage of the total budget of each line item that is paid over the first 48 months of the project. These costs are capitalized and will produce a depreciation expense based on a defined useful life and start month of depreciation. They sit on the balance sheet as 'fixed assets'.
There is an additional fixed cost schedule that lets the user define specific costs (32 items for each) for General and Administrative, Sales and Marketing, and Research and Development as well as other fixed cost of goods sold if not included elsewhere.
