Supply chain finance: Difference between revisions
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imported>Doug Williamson (Add link to Forfaiting page.) |
imported>Doug Williamson (Add link to Reverse factoring page.) |
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* [[Physical supply chain]] | * [[Physical supply chain]] | ||
* [[Receivables]] | * [[Receivables]] | ||
* [[Reverse factoring]] | |||
* [[Risk mitigation]] | * [[Risk mitigation]] | ||
* [[Supply chain management]] | * [[Supply chain management]] | ||
Revision as of 12:58, 10 February 2017
Simply defined, supply chain finance (SCF) is an arrangement whereby:
- A supplier of goods or services is able to obtain finance
- Based on the existence of a receivable due from the purchaser of those goods or services.
If the arrangement is non-recourse to the supplier then the funding will be based on the credit standing of the purchaser.
In this simple sense, supply chain finance is a form of invoice discounting, but is usually distinguished by the fact that there is a well structured scheme or arrangement to facilitate that invoice discounting, very often involving electronic invoicing, record keeping or communication.
Defined more broadly, supply chain finance can be viewed as:
- The use of financing and risk mitigation techniques
- To improve the management of the working capital and liquidity invested in supply chain processes and transactions.
See also
- Dynamic discounting
- Factoring
- Finance
- Forfaiting
- Invoice discounting
- Liquidity
- Non-recourse
- Payments and payment systems
- Physical supply chain
- Receivables
- Reverse factoring
- Risk mitigation
- Supply chain management
- Working capital
- Market-based approaches to cash management and liquidity
