The Supply Chain Finance (SCF, Supplier Finance, Reverse Factoring, or Inverse Factoring) is a financing solution put in place together with a large contractor (buyer) and its bank, which uses an online platform to offer businesses an efficient and innovative means to optimise their cash flow. It aims at being able to offer both a better visibility of commercial flows to suppliers and access to an alternative financing source under the best conditions directly possible. The supplier thus profits from the Contractor’s credit quality and improved security for the debts.

You are a contractor and you would like to:

• make your internal processes more fluid,
• optimise your working capital requirements,
• and consolidate your relationships with your suppliers.

Supply Chain Finance offers advantages to both the buyer and the supplier.

Advantages for the Buyer:

• Reduction in processing costs following the implementation of a centralised and external payment service,
• Improvement in relationships with suppliers due to increases in productivity in the administrative management of the relationship,
• Contribute to the maintenance of the supplier’s material (societal approach).

Benefits for the Supplier:

• Access to more stable and more competitive financing sources without impact on current credit lines,
• Increased visibility and easier conciliation of payments and bills,
• Option of deconsolidating debts, as required.

SUPPLY CHAIN FINANCE, HOW DOES IT WORK?
A SCF operation is structured around three main players: the business purchasing the assets (the Buyer), the business supplying the assets (the Supplier) and the Bank.