What Is Supply Chain Finance

What Is Supply Chain Finance – Could It Be The Missing Factor To Improving Your Cash Flow And Growing Your Business?

Cash flow is one of the most critical factors in any successful business. A lack of cash flow can prevent you from growing your business, and in extreme circumstances, can be the reason why the company has to shut down. That is why it is imperative to ensure that you do everything possible to maintain a positive cash flow so that you have money available to work for you as and when you need it.

What Is Supply Chain Finance?

Supply Chain Finance is a formal arrangement that ensures cash flow optimization for both buyers and suppliers within the business world. Supply Chain Finance is a win-win solution for all parties concerned as it is designed to allow businesses that are buying products or materials to increase the length of their payment terms while providing the option for their suppliers to get paid early. This ensures that the buyer and supplier both get what they need i.e. materials and cash which reduces the risk to all parties involved in the supply chain.

Four Important Things You Should Understand About Supply Chain Finance

Supply Chain Factoring is Not Considered Financial Debt – You must maintain as good a credit rating as possible as a buyer. Supply Chain Finance, also referred to as reverse factoring, is not considered financial debt when a credit check is performed. From the supplier’s perspective, it allows them to complete the transaction and is reflected on their balance sheet as a completed sale.

It Is Not Tied to A Single Financial Institution. – At AW Capital, we can arrange Supply Chain Finance with multi-bank capabilities. This means that our clients have access to a wide range of financial institutions across the world.

Supply Chain Financing Does Not Necessarily Require A Bank – It is possible to arrange Supply Chain Funding with the buyer, which is self-funded. This does not necessitate the involvement of a bank. Alternatively, if preferable, supply chain funding can comprise a combination of financing shared by the buyer, financial institutions, and capital markets.

Supply Chain Finance Can Be Arranged For Any Company Regardless of Size – Many small to medium-sized business owners struggle to grow their business because they are under the mistaken belief that options such as supply chain finance are only available for large multinational companies. This is simply not the case; in fact, we have arranged supply chain finance for some very small companies, which has provided them with the necessary cash flow to grow the business quicker and more significantly than they had ever anticipated.

Contact Us Today To Discuss Your Supply Chain Financing Options

If this article has answered some of your questions or made you consider Supply Chain Financing as an option, then contact us today to discuss your individual situation.

We are happy to explain the various options available to you and will work with you to ensure you find the right financial product for your specific needs.

Call us today on 03337726165


Supply Chain Finance