HVAC distributors extending net terms to contractors face a fundamental mismatch: traditional trade credit insurance operates on static annual reviews while contractor creditworthiness fluctuates dramatically with seasonal cash flow swings. The 2024-2025 market correction demonstrated this gap acutely, with contractors experiencing a 53-55% surge in equipment purchases before regulatory deadlines, followed by a 42-49% shipment crash that left many cash-strapped to pay invoices. Modern B2B net terms solutions like ResolvePay address this disconnect by providing real-time credit decisions that adjust dynamically to buyer health, advancing up to 90% of approved invoices within 24 hours.
HVAC distributors operate in one of the most seasonally volatile B2B markets, where contractor cash flow swings create predictable yet acute credit risk patterns. The industry's dependence on heating and cooling seasons creates extreme demand fluctuations: winter months drive heating equipment sales while summer drives air conditioning demand, leaving spring and fall as shoulder seasons with dramatically reduced cash flow.
The 2024-2025 regulatory transition to A2L refrigerants intensified this cyclicality, creating a perfect storm for distributor risk exposure. Contractors rushed to purchase R-410A equipment before the January 1, 2025 deadline, causing a 53-55% surge in shipments during October-November 2024. This was followed by a 42-49% crash in shipments in 2025-2026 as contractors faced reduced demand while carrying excess inventory.
This "bullwhip effect" forces distributors to manage inventory carefully during peak seasons to meet demand, then navigate payment delays during troughs when contractors lack cash flow to settle invoices. The result is a cash conversion cycle that extends during shoulder seasons, straining working capital just when distributors need to prepare for the next peak.
Contractor payment delays directly impact distributor operations in three critical ways:
Industry analyses show contractor challenges even in normal economic conditions, meaning distributors extending net terms must continuously monitor credit risk. During market corrections or seasonal troughs, these challenges can intensify, creating demand for ongoing credit assessment rather than annual reviews.
Trade credit insurance protects businesses against customer non-payment due to bankruptcy, insolvency, or protracted default, typically covering a substantial portion of unpaid invoices. The insurance includes three core components: buyer information and credit assessment, debt collection services, and indemnification of guaranteed receivables.
Premium structures vary based on industry risk and portfolio composition. These policies operate on annual underwriting cycles that assess customer creditworthiness based on historical financial statements and payment patterns.
Key coverage elements include:
Traditional trade credit insurance operates on yearly underwriting reviews that assess customer creditworthiness based on historical financial statements and payment patterns. Insurance policies provide coverage based on this annual assessment approach.
The claim process follows established timelines:
For HVAC distributors, this creates an exposure window during seasonal troughs. When contractors face cash flow crunches in spring or fall, distributors may wait months before insurance coverage activates, during which time they must fund operations without payment receipt.
ResolvePay's platform provides real-time credit decisions that continuously adjust to buyer health. The system uses proprietary AI models to evaluate thousands of buyer data points including payment behavior, industry trends, regulatory compliance, and behavioral signals to generate dynamic, scalable credit decisions.
ResolvePay's system provides:
This real-time responsiveness allows HVAC distributors to adjust credit limits based on contractor performance and seasonal patterns, optimizing sales growth while managing risk effectively.
ResolvePay's platform integrates directly into existing HVAC distributor operations, providing real-time credit decisions without disrupting established workflows. The system connects to leading ERP, accounting, and commerce platforms including QuickBooks, Oracle, Shopify, and Magento, automatically importing customer data and transaction history.
Key integration benefits include:
This seamless integration ensures that real-time credit decisions enhance distributor operations, providing the responsiveness needed to manage HVAC seasonal cycles effectively.
ResolvePay's non-recourse financing model provides protection against payment defaults. When ResolvePay approves an invoice, the platform advances up to 90% of the invoice value within 24 hours and assumes the risk of late payments or defaults on approved invoices. This eliminates extended waiting periods for payment.
The non-recourse structure delivers:
For HVAC distributors facing contractor financial challenges, this immediate risk transfer provides crucial protection during seasonal cash flow variations.
The speed-to-cash advantage of ResolvePay's platform transforms HVAC distributor cash flow management. Instead of waiting for contractor payments or extended claim eligibility periods, distributors receive up to 90% of approved invoice value within 24 hours.
This immediate cash access enables:
The result is a working capital cycle optimized for HVAC seasonality, enabling distributors to capture demand during peaks while managing seasonal risk.
ResolvePay provides an integrated B2B payments platform that combines credit expertise, invoice financing, and payment processing into a single solution. This holistic approach addresses the full spectrum of HVAC distributor financial needs, from credit assessment through cash receipt.
The integrated platform includes:
This integrated approach consolidates financial tools that HVAC distributors need, streamlining workflows and enhancing operational efficiency.
Embedded finance solutions like ResolvePay deliver key advantages for HVAC distributors:
For HVAC distributors operating in an industry with extreme seasonality and rapid technology transitions, this embedded approach provides the agility needed to thrive in dynamic market conditions.
ResolvePay enables HVAC distributors to offer flexible payment terms that expand contractor purchasing power without sacrificing their own cash flow. Contractors can access net 30, 60, or 90-day terms with 0% interest for 30-60 days, providing the working capital needed to manage seasonal cash flow swings and technology investments.
This expanded purchasing power drives:
For distributors, this translates to increased sales volume and customer retention, with ResolvePay's platform providing the credit management needed to offer these flexible terms.
In the competitive HVAC distribution market, flexible payment terms have become a key differentiator. Contractors increasingly expect net terms as standard practice, with distributors offering competitive terms gaining market advantage.
ResolvePay provides this competitive edge through:
This combination of instant approval, flexible terms, and seamless customer experience enables HVAC distributors to win and retain business in an increasingly competitive market.
ResolvePay's platform is designed for seamless integration into existing HVAC distributor technology stacks, minimizing implementation time and maximizing operational efficiency. The platform offers instant plug-ins for leading ERP, accounting, and commerce platforms, with flexible APIs for custom implementations.
Key integration capabilities include:
Consolidating credit assessment, invoice financing, and payment processing into a single platform provides significant operational advantages:
For HVAC distributors managing hundreds of contractor relationships with seasonal cash flow variations, this unified approach provides the operational efficiency needed to scale effectively.
ResolvePay delivers proactive credit management designed specifically for the dynamic HVAC distribution market. The platform serves as your comprehensive credit solution, combining credit assessment, invoice financing, and payment processing into a single integrated platform.
ResolvePay's HVAC-specific advantages include:
For HVAC distributors seeking to offer net terms and grow revenue while managing contractor payment risks, ResolvePay provides a modern solution with real-time responsiveness, integrated features, and industry-specific expertise tailored to the challenges of HVAC distribution in an era of extreme seasonality and rapid technology transition.
Trade credit insurance protects HVAC distributors against customer non-payment due to bankruptcy, insolvency, or protracted default. The insurance operates on annual renewal cycles with specified claim windows for protracted defaults, typically requiring 180 days from invoice date before filing eligibility. This creates an exposure period during HVAC seasonal troughs when contractors face cash flow challenges.
ResolvePay provides real-time credit decisions that continuously adjust to buyer health, while traditional insurance operates on static annual reviews. ResolvePay advances up to 90% of approved invoices within 24 hours with non-recourse protection. The platform evaluates thousands of buyer data points continuously, enabling detection of contractor credit changes in real-time rather than waiting for annual reviews.
Yes, ResolvePay's platform is designed to address HVAC seasonal cash flow variations. The AI-powered system automatically adjusts credit limits based on real-time contractor payment behavior and seasonal patterns. The platform advances up to 90% of approved invoices within 24 hours, providing immediate working capital to fund inventory purchases for peak seasons.
Non-recourse financing means that when ResolvePay approves an invoice, the platform assumes the risk of late payments or defaults on approved invoices. ResolvePay's non-recourse protection covers approved amounts, eliminating the need for significant bad debt reserves and providing immediate risk transfer upon invoice approval.
ResolvePay integrates directly with leading ERP, accounting, and commerce platforms including QuickBooks, Oracle, Shopify, and Magento through instant plug-ins and flexible APIs. The platform automatically imports customer data and transaction history, provides real-time credit decisions at checkout, and syncs approved invoices with existing accounting systems while maintaining a white-label customer experience.
This post is to be used for informational purposes only and does not constitute formal legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. Resolve assumes no liability for actions taken in reliance upon the information contained herein.