Finance Guide: Supply Chain Finance
Table of Contents
You might remember our overview of Invoice Finance from a few months ago. Since then, we’ve gone into detail about Invoice Factoring and Discounting, but what about your other options? Supply Chain Finance is less well-known – and seems a little more complicated – than Factoring and Discounting, so we’ve put together this short explainer to help you feel confident in your knowledge of all areas of Invoice Finance.
Supply Chain Finance: the facts
- Supply Chain Finance is a form of cash advance based on the credit rating of companies in the business’ supply chain – their network of suppliers and clients. It allows smaller businesses to benefit from the higher credit scores of larger businesses they deal with.
- One company will apply to the lending institution and receive immediate payment on an invoice – minus a small fee – from them. In turn, the recipient of the invoice can often be offered longer terms of repayment.
- Supply Chain Finance provides immediate access to working capital, so it’s a useful way to keep cash flowing while waiting for a payment.
- Better terms are usually available because of the strength of the credit rating of larger suppliers and clients in the business’ supply chain.
Click here to read our SlideShare presentation on Supply Chain Finance
Whether you’re a professional advisor researching funding options for a client or a business owner looking for a way to bring in some extra capital, you’ll enjoy our series of Finance Guides – all the information you need in a short and simple package.
Rangewell’s innovative online portal has mapped the entire market of SME finance in order to provide small businesses and their advisors with finance options tailored to their specific needs. If you’re interested in Supply Chain Finance, we’ll use our extensive market map of thousands of loan products and over 200 business lenders to connect you to whichever option suits your situation best.