Supply chain finance allows a supplier to leverage an alternative lender to create cash flow on credit, secured by the invoices in accounts receivable that have not yet been paid. This sort of financing allows the borrower’s customers to pay based on contract terms while the client’s business receives secures access to cash earlier. Inventory financing is a similar system that allows a company to gain access to needed cash-flow based on the on-hand inventory available. Companies often have significant amounts of capital locked up as either inventory or unpaid invoices, putting this capital to work as needed brings critical flexibility to a business, giving it the agility to respond to changing market conditions. Alternative lenders also provide additional useful services such as handling collections for factored invoices, managing many administrative or back office tasks and some possess the ability to fund against international contracts.
Supply chain finance services can help a business take advantage of unique or unplanned purchasing opportunities that often present themselves without warning or for a limited amount of time, even when cash on hand is tight. If a company seeks to have the financial flexibility to be prepared when opportunities arise, having financing already in place is a crucial and time-saving advantage. Financing also allows you to optimize cash flow and inventory to meet your product availability needs. For many businesses, maintaining the right mix and volume of inventory for customer demands is key to success because customers want the freshest products on demand. Supply chain finance allows the financial flexibility to make purchasing decisions as needed. This makes conducting business easier by improving your supplier relations and simplifying your accounting processes. By fulfilling customer needs quickly, you build customer loyalty while the purchasing opportunities you took advantage of lower unit costs and increase margins.
International transactions can complicate the typical supply chain finance arrangement because purchasers and sellers exist in different countries. Traditional lenders may not have the capability of financing international transactions, and if they do, it may be a complex and difficult procedure. Choosing the right alternative lender ensures that you have an experienced funding partner that can establish the supply chain financing you need for any transaction, foreign or domestic. Bibby Financial Services’ supply chain financing products are a fast, flexible way to finance your business based on your accounts receivable balances and inventory, something we’ve done for many clients including international manufacturer Chameleon Art Products which employed a $750K factoring facility from BFS that allowed them to align the US business with growth opportunities in the region, which was in conjunction with £400K in funding for Chameleon’s UK business.
Inventory financing and supply chain finance from BFS is a flexible solution to free up working capital and provide the funding your business needs. Contact us today to learn more about custom supply chain finance from Bibby Financial Services for your business.