Monthlii vs Business Finance Brokers vs Vendor-Funded Monthly Payments: Which Is Best for Software Companies?

Letting customers pay for software monthly wins more deals and smooths cash flow, but who funds those payments decides how much risk, effort and cost lands on your business.

Software is rarely a small purchase. An ERP rollout, a new CRM or a three year platform renewal can run to tens of thousands of pounds, and many buyers would rather spread that cost than commit a large lump sum. Vendors know this, which is why monthly payment options now come up in so many sales conversations.

There are three common ways to offer them. You can fund the payments yourself from your own reserves. You can refer customers to a traditional business funding broker.

Option 1: Funding monthly payments from your own reserves

Funding payments yourself gives you full control, but it turns your balance sheet into a lender and caps how much you can sell this way.

The model is simple. You agree the deal, invoice in instalments and wait for the cash to arrive month by month. There are no third parties, no commission and no handover of the customer relationship.

Where it works well

• You keep complete control of terms, pricing and the customer experience.
• There is no broker or lender involved, so nothing to integrate or explain.
• It suits small deals with long standing, low risk customers.

Where it gets difficult

• Cash is tied up. A deal paid over 36 months means you have delivered the value today and collect the revenue over three years.
• You carry the credit risk. If a customer struggles or stops paying, the loss is yours.
• It does not scale. Every instalment deal you offer reduces the working capital available for hiring, product and marketing.
• You become a credit controller. Chasing late payments is not what your sales or finance teams were hired for.
• Investors and lenders looking at your accounts may see long dated receivables rather than cash.

Most vendors who start here find the model works until it succeeds. The more customers who take it up, the more working capital it consumes.

Option 2: Traditional business funding brokers

Traditional brokers take the risk off your balance sheet, but they are built for general business finance, not for the way software is bought and sold.

A general broker searches a wide market of lenders for a business that needs money. That breadth is useful for equipment, vehicles, property or working capital loans, where the asset or the borrower's accounts do the heavy lifting.

Where it works well

• Your customer is not tying up your cash, and you are not carrying their credit risk.
• Brokers can reach a wide range of lenders and products.
• It suits customers who already have a funding relationship and want to explore options.

Where it gets difficult

• Software is intangible. Licences, subscriptions, implementation days and training do not behave like a van or a machine, and many lenders and brokers are cautious about funding them.
• Brokers rarely understand the product. Your customer is left explaining what an ERP rollout or a renewal actually is.
• The process is usually slow and paperwork heavy, which can stall a deal at the point your sales team wants it to close.
• You lose control of the experience. The finance conversation happens outside your sales process, often with a stranger.
• Funding is often built around a new project, not the annual renewal that makes up so much of a software vendor's revenue.

For a one off, bespoke funding need, a general broker can be a sensible route. As a repeatable part of how you sell software, it tends to add friction at exactly the wrong moment.

Option 3: Monthlii

Monthlii lets you offer monthly payments on software without funding them yourself and without sending customers to a generalist broker.

Monthlii is a specialist funding service for technology purchases. It works with a panel of lenders who understand software, implementation and renewals, so customers are assessed by people who know what they are buying.

How it works

1. You agree the software purchase with your customer as usual.
2. You introduce Monthlii, or add a pay monthly link to the invoice.
3. The customer completes a short application and e-signs online.
4. Once funded, you are paid in full upfront, and the customer pays monthly.

Where it works well

• You receive your money on day one, so there is no working capital tied up and no credit risk on your books.
• It covers the purchases vendors care about most, including new implementations and annual renewals.
• The finance conversation stays inside your sales process, with a team that understands the product.
• It is free for partners and introducers, so there is no cost to start offering it.
• It is built for repeatable use. Once it is part of how you quote, it works on every suitable deal.

What to bear in mind

• Customers still need to be approved by a lender, so it will not suit every buyer.
• It is designed for established UK businesses, so very small trading structures may not qualify.

The gap Monthlii targets is one that most funders overlook: monthly payment terms on annual software renewals, where the vendor wants the full amount upfront and the customer would rather spread the cost.

Side by side

Only Monthlii pays you upfront without using your own cash, and it is the only one of the three built around software purchases.

Which route is right for you?

If you offer monthly payments regularly, a specialist is the strongest fit because it protects your cash and keeps the sale moving.

• Fund it yourself if you only do the occasional deal, your customers are low risk, and you have cash you are happy to leave tied up for years.
• Use a traditional broker if a customer has a broader funding need that goes beyond a software purchase, or wants to shop the wider market.
• Use Monthlii if you want to offer monthly payments as a standard part of selling software, get paid in full upfront, and avoid taking on credit risk or admin.

These options are not mutually exclusive. Many vendors keep a small amount of in house flexibility for long standing customers and use a specialist for everything else.

If you would like to see how pay monthly could work alongside your own sales process, get in touch with the Monthlii team.