Supply Chain Finance | 2018 Supply Chain Finance (SCF) Guide

What is Supply Chain Finance?

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Supply Chain Finance – At the Forefront of Global Trade

Supply Chain Finance (also known as SCF or supplier finance), is a cash flow solution which helps businesses free up working capital trapped in global supply chains. It is a solution designed to benefit both suppliers and buyers; suppliers get paid early and buyers can extend their payment terms. This solution allows businesses which import goods to unlock working capital as well as reduce the risk associated with buying goods in bulk and/or transporting them globally (read more about risks of supply chain finance here).

How can we help you with supply chain finance?

It’s our job to find you a funder who will assist in managing your global supply chain through structured trade finance, stock or invoice finance, from over 250 lenders; bank and alternative funders who specialise in different products or geographies.

We can help you assist your suppliers, end customers and buyers, by looking at a range of funding options from receivables factoring to trade facilities.

We work 24/7 to ensure that when the time comes, we’ll have a finance solution ready for you, whilst you can focus on growing your business.

At Trade Finance Global we can quickly get to the key decision makers of financiers, to make sure your application gets through to the right person.

We’re 100% independent: working only for our businesses

Trade Finance Global are not tied to any lenders, we arrange a wealth of funding options for you so that you can choose the most appropriate solution.

Get in touch with our supply chain finance experts, even if you already have an existing facility

Want to become a finance expert? Receive our free supply chain finance guides

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The Benefits of Supply Chain Finance

Benefits to buyers/ importers
  • Buyers can maintain a healthy balance sheet
  • Buyers maintain a good relationship with suppliers
  • Promotes competition/ diversity in suppliers
  • Allows buyers to make purchases in bulk to save costs
  • Buyers can work with complex end-to-end supply chains
  • SCF doesn’t disturb existing bank relationships or overdrafts

Benefits to suppliers/ exporters

  • Suppliers can get paid earlier than their usual 30-day credit terms
  • Little financial risk – insurance is sorted through a supply chain financier
  • Doesn’t cost the supplier any extra
  • Allows supplier to have the cashflow to work on numerous deals simultaneously
  • Helps provide liquidity and reduces financing costs

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Supply Chain Finance – Knowledge Hub

UCP 600 governance and guidelines
Learn more

An exporters guide for SMEs
Learn more

Supply chain finance rates are 10 times lower than using traditional factoring facilities

USD $1.3tn - the potential market for supply chain finance

10% - the global available marketplace eligible for supply chain finance

40% of all supply chain finance now uses digital software or proprietary technology

A snapshot of export factoring
Learn more

Structured terms of payment
Learn more

Diagram: How does Supply Chain Finance work?

Hub Articles

Expert View: Enrico Camerinelli on Trade and Supply Chain Finance

Following the success of Sibos 2016, we spoke to Enrico Camerinelli, a senior analyst at Aite Group specializing in wholesale banking, cash and trade finance, and payments.

Read more →

Pre-shipment, Post-shipment and Supply Chain finance

What does a small business actually use trade finance for? We can categorise trade-financing options into: pre-shipment finance, post-shipment finance and supply chain finance (SCF).

Read more →

Structured Trade Finance

Structured trade finance products are used primarily in the commodity sector by traders, producers and processors. Banking corporations tailor these financing arrangements based on the needs of the client. Structured trade products are mainly warehouse financing, working capital financing and pre-export financing. Also, some institutions extend reserve based lending and finance the conversion of raw materials into products amongst other bespoke finance products. Structured trade finance products are extended across the supply chain to facilitate trading activities.

Read more →

Frequently Asked Questions

Who can use supply chain finance?

Currently, supply chain finance programmes exist predominantly in Western European and US markets, but Asian markets are quickly following suite, particularly India and China. Chief Financial Officers are beginning to include supply chain finance as part of their working capital and treasury agendas. Despite being around for over 70 years, supply chain finance is now being transformed by digital innovation. Proprietary software and technology platforms work with banks to automate and provide instant rates and terms which suit both parties. Payables data will typically get uploaded to a supplier platform and suppliers can immediately approve invoices and see invoices before they mature.

Supply chain finance is great for large corporations or SME suppliers/ buyers. Whether you’re looking to import automotives and vehicles or retail stock such as clothing, supply chain finance is an innovative solution which the UK government fully supports and encourages.

How can Trade Finance Global help your business access supply chain finance?

At Trade Finance Global, we are the leading experts in providing insight on global supply chain and trade finance. In addition, we have a network of expert funders and advisors who have helped SMEs and businesses access finance to import and export goods or services worldwide. We work with you to find out what your business requires.

Our specialists work with leading funders and banks to offer you the most competitive rates; simply get in touch using the contact form below, and briefly let us know what you’re looking for. Alternatively, find out more about supply chain finance by reading some of the articles we have put together above.

How does Supply Chain Finance work?

  1. Normally a buyer will want to purchase goods from a supplier, who will invoice the buyer on standard credit terms (normally 1 month).
  2. A supply chain finance institution, or a GSCF platform acting on behalf of the buyer will remit the invoiced amount to the supplier, often paying early so that a discounted price (or early payment discount) can be applied.
  3. The supply chain financier will then extend the payment from the buyer to a further 30-90 days, meaning the buyer has ultimately extended the payment period.
  4. The financing rates are based on the buyer’s risk, the supplier will normally get paid instantly, and the rates are typically 10 times lower than using a traditional factoring agency.

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