Help leverage the credit facilities of your corporate customers to finance the working capital of their suppliers.

Financing a business was seen as quite straightforward with the cheap and easy money that was available. This is no longer true. Clients failing to pay on time or extending payments terms are risking the survival of many suppliers. Liquidity has been the loser since the credit crunch started and the impact on these smaller enterprises is now being seen.

The supply chain of an organisation is part of its strategic advantage and any break in the supply chain has the ability to severely impact the organisation. Even with this risk there are few cost effective financing options available to the smaller corporate.

Supplier Finance provides a solution

What alternative financing options are available to the supplier that will not force a cost increase through to the buyer? Without effective supplier financing the buyer, regardless of their size, will be affected by the collapse or inability of a supplier to supply.

Supplier financing is one of the true win-win solutions in the market, it could even be referred to as the win-win-win. The supplier wins because they have access to non-recourse financing at a more competitive rate; the buyer wins because it is a key component of a working capital optimisation programme; and the financial institution wins because the acceptance of this new product is much higher than traditional financing solutions, therefore generating a new revenue stream.

Supplier finance is new! Some would say it has been in operation for many years but there are a few distinguishing features of the new model. Multi-currency funding limits, full web visibility, audit controls with post-trade financing available to the supplier on a non-recourse basis are among the new features.

Supplier financing is seen as an important tool in global trade. It offers transparency within the corporate. For the first time there is a financing solution that can be streamlined to allow current financial information, such as supplier invoices and sales invoices, to be made available. Financial risk should be reduced as financing is based on the actual trading of the company and the parties in the chain are more transparent.

Corporate STP is the cherry on the cake?

When it comes down to corporate straight through processing (STP) a corporate that has an efficient back office can take full advantage of supplier financing. It is now becoming an incentive for the corporate to drive for STP in the financial supply chain and eInvoicing is a key component of this. 

eInvoicing is only one process in the financial supply chain but it is a start that will support the move to the full digitalisation of the back office processes and the ability to fully integrate through the chain for full financial supply chain STP.   

Why not get it all?

All in all, today, borrowing money has become harder and more expensive for many enterprises. Money needed to fund the working capital of the enterprise. Naturally, they will look for a banking partner that could help solve this problem.

TietoEnator’s Supplier Finance solution will help leverage the credit facilities of your corporate customers to finance the working capital of their suppliers. In addition to increasing your clients STP, supporting their financing needs and lowering your risk, it helps you to generate a continuous revenue stream from every financing agreement. TietoEnator’s Supplier Finance offers all your clients a solution that will encourage them to continue see you as their primary banking partner.