Vendor finance: Difference between revisions
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imported>Doug Williamson m (Spacing 14/8/13) |
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An arrangement between a large creditworthy trade customer, a smaller less creditworthy supplier (vendor), and a bank. | An arrangement between a large creditworthy trade customer, a smaller less creditworthy supplier (vendor), and a bank. | ||
The vendor discounts the invoices of its large creditworthy customer with the bank, with the knowledge and agreement of the customer. | The vendor discounts the invoices of its large creditworthy customer with the bank, with the knowledge and agreement of the customer. | ||
The customer pays the bank on the normal due date of the invoices. | The customer pays the bank on the normal due date of the invoices. | ||
The rate of discount charged by the bank will be more favourable for the supplier/vendor than could normally be achieved by the supplier on their own. | The rate of discount charged by the bank will be more favourable for the supplier/vendor than could normally be achieved by the supplier on their own. | ||
== See also == | == See also == | ||
* [[Debt factoring]] | * [[Debt factoring]] | ||
* [[Vendor]] | * [[Vendor]] | ||
Revision as of 10:24, 14 August 2013
An arrangement between a large creditworthy trade customer, a smaller less creditworthy supplier (vendor), and a bank.
The vendor discounts the invoices of its large creditworthy customer with the bank, with the knowledge and agreement of the customer. The customer pays the bank on the normal due date of the invoices.
The rate of discount charged by the bank will be more favourable for the supplier/vendor than could normally be achieved by the supplier on their own.
