What is Supply Chain Finance?

Supply chain finance, also known as supplier/vendor finance or reverse factoring, is a method of optimizing cash flow by allowing companies to lengthen their payment terms to their suppliers while providing the option for suppliers to get paid early in exchange for a small discount.

In this scenario, all parties win! The buyer optimizes working capital by extending the trade payable cycle and the supplier generates additional operating cash flow. Thus, the risk of disrupting the supply chain is minimized.

What is Supply Chain Finance?

Supply chain finance, also known as supplier/vendor finance or reverse factoring, is a method of optimizing cash flow by allowing companies to lengthen their payment terms to their suppliers while providing the option for suppliers to get paid early in exchange for a small discount.

In this scenario, all parties win! The buyer optimizes working capital by extending the trade payable cycle and the supplier generates additional operating cash flow. Thus, the risk of disrupting the supply chain is minimized.

Funders, Buyers and Suppliers

Supply Chain Finance is a way to unlock the cash that is hidden in the supply chain, make it more efficient and reduce supply chain risk. SCF allows Buyers to extend payment terms to their Suppliers while giving the Supplier the option to get their invoices paid early.

To operate effectively, supply chain finance requires an ecosystem that improves the velocity of working capital across a supply chain. Below are the three main participants in the supply chain finance (SCF) ecosystem.

Funders


Bank and non-bank sources of investment capital that advance funds to cover the cost of approved supplier invoices. That’s FSW Trade Finance!

Buyers


Typically, large companies that rely on many supplier-provided goods and services to deliver products for their customers.

Suppliers


Companies that supply goods and services to buyers in the supply chain ecosystem. Some suppliers are so large that they also operate as buyers thereby having their own complex supply chains and the same need to optimize cash flow.

Funders, Buyers and Suppliers

Supply Chain Finance is a way to unlock the cash that is hidden in the supply chain, make it more efficient and reduce supply chain risk. SCF allows Buyers to extend payment terms to their Suppliers while giving the Supplier the option to get their invoices paid early.

To operate effectively, supply chain finance requires an ecosystem that improves the velocity of working capital across a supply chain. Below are the three main participants in the supply chain finance (SCF) ecosystem.

Funders


Bank and non-bank sources of investment capital that advance funds to cover the cost of approved supplier invoices. That’s FSW Trade Finance!

Buyers


Typically, large companies that rely on many supplier-provided goods and services to deliver products for their customers.

Suppliers


Companies that supply goods and services to buyers in the supply chain ecosystem. Some suppliers are so large that they also operate as buyers thereby having their own complex supply chains and the same need to optimize cash flow.

We Support Both Buyer-Centric and Supplier-Centric Supply Chain Finance Models

FSWs Buyer-Centric
Supply Chain Finance Model

FSWs Supplier-Centric
Supply Chain Finance Model

We Support Both Buyer-Centric and Supplier-Centric Supply Chain Finance Models

FSWs Buyer-Centric
Supply Chain Finance Model

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FSWs Supplier-Centric
Supply Chain Finance Model

(pinch image to enlarge model)

Supply Chain Finance Unlocks the Cash that’s Hidden Inside Your Supply Chain!

Buyers


Increasing the time it takes to pay a supplier improves several financial metrics and most importantly, frees up cash that would otherwise be trapped inside the supply chain.

Suppliers


Supply chain finance offers suppliers a way to mitigate the effects of payment term extensions and to accelerate their own cash flow.

Supply Chain Finance Unlocks the Cash that’s Hidden Inside Your Supply Chain!

Buyers


Increasing the time it takes to pay a supplier improves several financial metrics and most importantly, frees up cash that would otherwise be trapped inside the supply chain.

Suppliers


Supply chain finance offers suppliers a way to mitigate the effects of payment term extensions and to accelerate their own cash flow.

FSW Trade Finance allowed my company to free up enough hidden capital to expand our operations. We never knew we aleady had the money until we met up with the geniuses at FSW.

Alejandro P.

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