Supply Chain Financing (Supplier Credit)
Extend terms to keep trade flowing.
Supply chain financing, or supplier credit, optimizes cash flow by allowing larger companies to lengthen their payment terms to their suppliers who currently offer very short payment terms or require cash only.
TFS’s Supply Chain finance facilities optimized working capital for clients and allows for clients to extend payments on supplies at no cost to the supplier. Supply Chain Financing is usually unsecured and clients can have senior lending facilities at the same time.
How it works:
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.
Advantages to Clients:
- Optimizes cash flow for companies with strong credit ratings
- No need to disrupt or make any changes to existing bank lines of credit
- Cost-effective access to financing, without tying up their own assets or credit lines
Advantages to Suppliers:
- Relieve the competitive pressure to provide extended credit terms and encourage customer loyalty
- No financial cost or burden to you
- Quicker payment of your invoices as part of the overall supply chain financing, in some cases
- Flexible program, use only as needed