Supplier Finance

Cash flow is one of the most important financial considerations for any business. The current economic climate is forcing many companies to better manage liquidity and strengthen their balance sheet. Supplier financing can help with cash flow because it may allow you enough time to sell the products you receive from your supplier before having to pay for them.

Supplier Financing also known as supply chain finance (often referred to as SCF/Supplier Finance/Reverse Factoring) can be an attractive way for companies to improve their working capital position.

This type of financing occurs when you make a purchase from one of your suppliers or vendors on credit. You place an order for raw materials or finished goods, and the supplier ships it to you, along with an invoice. From the time you receive the goods until you pay the invoice, the supplier is, in essence, giving you a short-term loan.

Supplier finance pays the supplier on delivery of the materials or goods and then you pay the Supplier finance company either a lump sum or on instalments over a term of usually 2 -6 months.

Thus, helping you own Cashflow and giving you time to either sell the goods or refinance the Supplier finance contract into a longer term financing arrangement, usually at a lower cost.

In some cases, Supplier finance can be structured to pay deposits required to secure an order from a supplier, and then the supply finance facility used to pay the balance of the order.

How it works?
  1. Your order goods from a Supplier.
  2. The Supplier Finance company authorises the supplier.
  3. You receive the goods or materials for re-sale to customers
  4. You select the Supplier you want to pay.
  5. Your Supplier is paid in full by cash advance from the Supplier Finance Company
  6. Then you repay the Supplier Finance Company over term customised to your cashflow 
What information you need to supply
  • How long you have been in business?
  • What is your current financial trading position?
  • What sort of materials or goods are you trading in?
  • Who are your Suppliers?
  • What is the exit strategy for the Supplier Finance company so it can be repaid?

Supply Chain Finance is an ideal funding solution for businesses that purchase goods from suppliers and sell to business customers on standard trade credit terms.

For example, manufacturers that need to meet demanding production schedules using parts or wholesalers that need to maintain high stock levels for popular products.

To find out more about how you can take advantage of our Supplier Finance, Supply Chain Finance, Cashflow Finance options, , complete a quick enquiry form or call us on 1300 885 244

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