Supply Chain Finance

In supply-chain funding, a supplier to an approved buyer can get immediate payment (less a fee) from a bank or specialist supply-chain financier for goods supplied – once the buyer has approved an invoice for payment. The buyer pays the lender according to the lenders’ terms. This arrangement enhances the supplier’s cash flow as they do not have to wait for the full payment term to be paid. If the buyer is a large company with a high credit rating, supply-chain finance terms are likely to be beneficial because the risk of delay or non-payment (which the lender takes on) are reduced. Supply chain finance programs are always established by the Buyer and offered to some or all of the Suppliers.