Supply Chain Finance
When you think of finance, you would normally think of something that costs money. Not so with an exciting new supply chain finance product.
The supply chain finance product is an off balance sheet credit fund, made available to businesses to pay their suppliers/subcontractors. For example: your business currently pays your supplies/subcontractors on 30 days but some would like to receive payment early to assist their own cash flow. They can elect to be paid at any time, in exchange for a small discount fee. A portion of this discount fee can be then shared with your business in the form of a cash rebate – up to 9.75% pa.
When it comes time to pay your supplier, you pay the finance provider instead.
This has the multiple benefit of supporting the cash flow of your supply chain, hopefully strengthening your business in the process, plus adding some additional funds to your bottom line, all at no cost to your business.
Some of your creditors may already be using invoice finance to assist their cash flow. By implementing supply chain finance to your business, it removes the need for them to have invoice finance, plus you receive a cash benefit out of it.
They system is setup through an easy to use online platform.
In addition to the above benefits, businesses also have the option of extending their own payment terms to the finance company. The ability for a business to use it’s working capital in other areas of the business, other than its supply chain can have significant benefits.
Businesses are also using supply chain finance to receive better pricing from their suppliers. In a recent example, a manufacturing business who normally paid on 30 days to its supplier asked them what discount would be offered to pay their invoice up front. By using supply chain finance to pay the invoice when it was raised, they were able to secure a 12% discount, significantly more than the cost of using supply chain finance to pay the supplier upfront.
Do you purchase items from overseas? Supply Chain Finance can also be used to pay your international suppliers prior to shipping. 90 days later you pay the financier back, which is often more than enough time to fit in with your sales cycle.
Click here for more information: https://www.krwfinance.com.au/contact-us.html