
Supplier Financing
Supplier Financing ensures the suppliers to receive the cash out of their receivables at a maturity previously set by them and thus getting rid of any liquidity trouble. On the other hand, the corporate and large-scale buyers purchasing goods from suppliers enjoy flexible payment terms and maintain uninterrupted supply of goods through efficient purchase method.
Advantages of Supplier Financing for the suppliers:
- Collection in advance of the maturity date
- Regular cash flow
- Guaranteed payment and collection
- Stronger relationship with the buyer
- Competitive advantage to be enjoyed in purchases in cash thanks to early collection
- Relatively lower financing costs given the creditworthiness of the buyer
- Financing based on the payment solvency and assignment of receivables
Advantages of Supplier Financing for the buyers:
- Flexible payment terms
- Stronger relationship with the suppliers
- Efficiency in terms of enterprise capital and balance sheet management
- Process efficiency to reduce the supply chain management cost
- Ability to negotiate payment and pricing terms with the supplier
- Uninterrupted payment process for strategic suppliers