Supply chain financing, or supplier credit, optimizes cash flow by allowing companies to lengthen their payment terms to their suppliers, and/or providing the option for their suppliers to get paid early. The buyer optimizes working capital, and the supplier is able to provide customers with the extended terms they desire, at no cost to the supplier.
TFS Supplier Credit is a beneficial solution for companies with supply chains that have a significant lead time from the time raw materials are ordered to the time when finished goods are shipped to the end customer; that use suppliers based in emerging markets where it can be expensive and onerous to secure local financing; and/or deal with suppliers that are unable, or unwilling to extend credit terms.
TFS acquires inventory from the SUPPLIER on behalf of the CLIENT.
TFS immediately re-sells inventory to the CLIENT, creating an Accounts Receivable.
CLIENT pays TFS open Accounts Receivable on due date.