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Supply Chain Finance: Exploring Different Financing Options and How Financely Group Helps Clients Access Them in Frontier Markets
Supply chain finance is a financial tool that enables companies to optimize cash flow and working capital management throughout the entire supply chain, from raw material suppliers to end customers.
By providing financing to suppliers, supply chain finance can help improve liquidity, reduce financial risk, and increase the efficiency of the supply chain.
Different Types of Supply Chain Finance
There are several different types of supply chain finance, including factoring, reverse factoring, dynamic discounting, and inventory financing.
Factoring involves selling accounts receivable to a third-party financial institution, which then advances a percentage of the total value of those receivables to the company.
Reverse factoring, also known as supplier finance, involves the financial institution paying the supplier on behalf of the buyer, in exchange for a fee or interest rate.
Dynamic discounting allows suppliers to receive early payment in exchange for offering a discount to the buyer.
