Why Supply Chain Financing?

While physical supply chain technologies and solutions have matured over the past several years, innovations in financial transactions in the supply chain have not kept pace. Inefficiencies in the supply-chain financial flows cost companies billions annually.

For example, in the United States alone, the United States Federal Reserve estimates that US$6,000,000,000,000 in payables are outstanding at any given time, and that the cost of financing this amount equates to roughly four percent of the cost of goods sold — an amount roughly equivalent to the cost of transportation and logistics.

In fact, CFO magazine estimates that suppliers hedge fully one-sixth of accounts receivables with idle cash. Crédit Suisse estimates that "The value created by reducing the financing cost of goods moving through the supply chain by even a few basis points is far greater than any cost savings possible from traditional transportation and warehousing targets." Recent trends such as outsourcing, globalization, low-cost-country sourcing and corporate best practices that seek to increase payment terms only compound inefficiencies in supply-chain financial flows.

Supply Chain Financing aims to address this problem of inefficient financial flows.

Commercial Financing

More offerings  |  Contact us