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Supply Chain Finance is not necessarily best way to help fund your suppliers

Supply Chain Finance (SCF) should be a great deal for small and mid-sized enterprises (SMEs) squeezed by late payments and smaller lines of credit, but, particularly for SMEs, take up has been slow. One of the reasons is that the finance provider, typically banks, have been reluctant to provide funding to the riskier SMEs.

SocGen new platform

CGA, a fully-owned Societe Generale subsidiary, has launched a new supply chain finance platform for larger corporates to foster economic growth by supporting small and medium-sized companies. 

For buyers, the platform offers:

  • payment factory option which delivers flexibility of invoice payment and security to buyers’ supply chains,
  • reporting on the use of the programme by their suppliers,
  • direct cost-savings and productivity gains,
  • ability to open up the platform to third party financial partners, which may provide additional financing to suppliers. 

For suppliers, the platform offers:

  • optional pre-financing of their invoices, which might otherwise be difficult to obtain, through a simple online request process, giving them the necessary liquidity to sustain their business,
  • off balance sheet accounting treatment which is particularly interesting for the biggest corporates,
  • flexible and detailed electronic reporting enabling administrative and productivity gains.  

SocGen provide the funding for the SCF. 

Taulia Enhanced Dynamic Discounting service

The Taulia Enhanced Dynamic Discounting, launched last month, allows the buyer to choose to capture early payment discounts using your own capital, the capital of a third-party financial institution or a combination of both – ensuring the capture maximum discounts without impacting your balance sheet or shortening your DPO. 

How TEDD works:

Source & Copyright©2014 -  Taulia

Taulia’s exible platform for supplier financing, eInvoicing and supplier self-services offers choice and convenience. When Taulia provides the financing, they are currently using capital market funding but may well bring banks in at a later stage.

Take holistic approach to supply chain financing 

C2FO, the world’s largest supplier of dynamic discounting services, are of the opinion that there no single solution to financing the supply chain. A combination of Purchase cards, their unique dynamic discounting platform and supply chain finance is required:

Source & Copyright©2013 - C2FO

C2FO also has an interesting view on the various strengths and weaknesses of solutions for maximising accounts payables, see.

CTMfile take: There is no doubt that SCF programmes alone cannot all the supply chain funding needed. A combination of different funding sources is needed as the innocent ltd case study showed.

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Trade Finance
Procure-to-Pay Cycle in WCM