5 Companies to Consider for Supply Chain Finance

Supply chain finance is a set of Company and financing processes that link the different parties in a transaction (buyer, seller and financial institution) to reduce financing costs and improve business efficiency. Short-term credit that maximizes working capital for both buyer and seller is provided by what the wired kids call SCF.

There are several SCF transactions, including an extension of buyer’s accounts payable terms, inventory financing, and debt discounting. SCF solutions differ from traditional supply chain programs to improve working capital, such as factoring and payment discounts, by linking financial transactions to value throughout the supply chain. Additionally, SCF encourages collaboration between buyer and seller, rather than the competition that often pits buyer against seller and vice versa.

Tom Roberts, senior vice president of marketing at PrimeRevenue, warned International trade readers in September 2016 that a multinational bank may not be the way to go when it comes to SCF. “First, global supply chains and multinational corporations banks are highly sensitive to changes in the economic and geopolitical landscape,” Roberts wrote. “Supply chain finance programs that are locked into a single funding source are hostage to that funder’s risk tolerance. It’s a dangerous game, especially as the global coverage of multinational banks continues to be a moving target.

No bank, no matter how global, has the processes and systems in place to serve all currencies and all jurisdictions, he also noted. “If a company needs to add a supplier that cannot be financed by its multinational bank, it must not only seek alternative financing, but also manage the integration of the back-end systems necessary to facilitate the negotiation of receivables. It’s a resource-intensive approach that many companies simply can’t afford.

According to Roberts, the best supply chain finance programs are typically based on multi-donor platforms, rather than bank-owned, closed platforms. “While it may seem counterintuitive to simplify supply chain finance by adding more players, it is not,” he wrote. “With the right processes and systems in place, a multi-donor strategy can increase program participation, secure more competitive pricing and discounts, and ultimately increase cash flow in a predictable and sustainable way for buyers and suppliers. suppliers.”

The following are International tradeSCF’s picks for places to consider for SCF.

Capital Raistone

Located on Madison Avenue in New York, Raistone Capital began as a division of Seaport Global, an independent, full-service investment bank. Today, Raistone Capital has access to significant levels of institutional capital and the ability to meet client needs, “whether it’s $50,000 or $300,000,000 and more,” according to the company. Raistone has even created invoiceXcel (iX), a complementary financial solution allowing banks “to continue to serve their customers in this ever-changing regulatory environment by providing additional capital offerings, such as supply chain finance and financing accounts receivable.

Flex port

Headquartered in San Francisco, with global offices in several major US cities as well as Hong Kong, mainland China, Germany and the Netherlands, Flexport offers customers lines of credit ranging from 100,000 to 20 million dollars to fund inventory, freight, and duties and for customers to accelerate product expansion and revenue growth; enable strategic decisions that reduce landed costs; and minimize supply chain disruptions. Better yet, it costs nothing to connect with a Flexport Capital expert to discuss how your vendor terms, customer terms and capital structure can be optimized to support your working capital goals and growth. of your company.

PremiumRevenue

Give the expertise that Tom Roberts has already shared via International trade, how could we in good conscience ignore his Atlanta-based company which also has offices in Hong Kong, Australia, London, Frankfurt and Prague. Billed as “the leading provider of working capital fintech solutions”, PrimeRevenue helps more than 30,000 clients in more than 70 countries optimize their working capital to effectively fund strategic initiatives, gain competitive advantage and strengthen relationships. throughout the supply chain. Established in 2003, PrimeRevenue now boasts of having “the largest and most diverse global funding network of over 100 funding partners”. They support over 30 currencies on a single cloud-based, multilingual cross-border network, facilitating over $200 billion in payment transaction volume per year.

Global Trade Finance

London-based TFG helps companies raise debt capital, access many traditional forms of finance whilst also specializing in alternative finance and complex financing solutions linked to international markets. Trade. “We help businesses raise funds in ways that are sometimes beyond the reach of traditional lenders,” according to the company, which taps into more than 250 lenders with unique goals across different products and/or geographies. And TGF boasts of being able to “quickly access key financial decision makers, to ensure that your application reaches the right person”. This ability is solely based on reputation, as TGF is 100% independent and not tied to any lender. Instead, they find the most appropriate SCF solution for the individual client.

Bank of America Merrill Lynch

Okay, so much of this article explains why a multinational bank might not be the best option when it comes to SCF, but Charlotte, NC-based Bank of America Merrill Lynch, which also has central centers in New York, London, Hong Kong, Minneapolis and Toronto, has a strong end-to-end SCF program. Bank of America Merrill Lynch boasts of having a number of tools to help: segment suppliers and analyze prices; design an optimal marketing program; and educate providers on the benefits of the program.

“Bank of America Merrill Lynch ensured that the necessary resources (support staff, legal, credit, etc.) were all working to achieve the effective deployment of the program,” says Philippe André Marcoux, director of credit and treasury at the client SCF Uni-Select Inc. ., a large multi-service company that distributes spare parts, tools, equipment and accessories for motor vehicles. “Communication between Bank of America Merrill Lynch, our suppliers and ourselves was the driving force behind the successful implementation. The tools for evaluating the benefits for our suppliers and for ourselves were essential in convincing our team to participate. »