Supply Chain Finance from ScotPac.

Supply Chain Finance works by unlocking the working capital that is tied up in the supply chain. In simple terms, it allows buyers to extend the time before they need to pay for goods and helps suppliers to get paid for their goods and services faster. It can involve trade finance, invoice finance or a combination of the two business finance solutions.

Suppliers and buyers can both benefit by gaining access to more working capital to enable business growth, without risking the family home as security. There are several benefits of Supply Chain Finance, including:

Buyers:

• Access extended payment terms
• Bulk buy to secure discounts from suppliers
• Ensure the supply of goods and materials isn’t impacted by cash flow gaps
• Maintain working capital to fuel growth

Suppliers:

• Increased cash flow
• Access funding at more affordable rates
• Get paid faster
• Build stronger relationships with buyers
• Our facilities grow in-line with your business, so you don’t need to constantly re-negotiate funding limits.

Both the supplier and buyer in a B2B transaction can benefit from Supply Chain Finance. Buyers can access longer payment terms and improve access to working capital, while suppliers can get paid for their goods and services faster.

This type of funding solution can be used across a wide range of industries, including:

• Manufacturing
• Wholesale
• Construction
• Transportation
• Mining

Supply Chain Finance can be used to support the working capital demands of both large and small businesses. Cash flow gaps and extended payment terms can be a problem for businesses of all sizes. With a Supply Chain Finance solution, buyers and suppliers can access the funding they need to maintain liquidity and keep growing.

Supply Chain Finance is not a loan. It’s a solution that typically utilises invoice finance and trade finance to fund both parties in a B2B transaction.

Unlike a traditional business loan or line of credit, Supply Chain Finance is an off-balance sheet form of funding. It can be a good solution for businesses that want to quickly improve cash flow without impacting their credit score or taking on long-term debt.

No. There are some similarities, but Supply Chain Finance is a broader funding solution that includes a range of working capital solutions, and there are differences in how the two business finance solutions work.

Invoice factoring is a solution that allows businesses to raise capital and improve cash flow by “selling” their unpaid invoices to the factoring company. The accounts receivables are used as collateral to secure a fast cash injection.

Rather than the supplier using their unpaid invoices as collateral, Supply Chain Finance can be used by the buyer and supplier. It can facilitate early payment for the supplier and allow for extended payment terms for the buyer. This facility can be achieved through a combination of trade finance and invoice finance solutions.

The cost of Supply Chain Finance depends on several factors, including the length of the funding facility, the amount of finance required, and whether the solution involves trade finance, invoice finance, or a combination of both solutions.

Speak to one of our business finance advisors today for more information and to receive a tailored Supply Chain Finance quot

Talk to one of our friendly Supply Chain Finance specialists to find the best solution for your business and what you need to apply.