Supply chain finance is a great opportunity because it gives you the ability to access funds when they are most needed and at the lowest interest rates. Many people think that supply chain finance is complicated, but it's actually incredibly simple.
Supply chain finance is the "next big thing".
A growing number of companies are taking advantage of supply chain financing to improve cash flow, liquidity and working capital. This includes businesses that need to fund inventory purchases and other expenses related to manufacturing or distribution but who don't have access to traditional bank loans because they lack collateral or a strong credit history.
Supply chain finance can help you manage your business's cash flow by providing:
-The ability to pay bills when they're due instead of waiting for payment from customers. -A short term financing option with no interest or set term length, so there's flexibility if your business needs change. -An alternative to traditional debt financing solutions like loans, which require collateral and good credit.
As one of the most important areas in the financial services industry, supply chain finance has seen significant growth over the past few years. It is estimated that by 2021, it will be a $5 billion market worldwide.
This growth can be attributed to several factors:
· Small businesses account for more than 70% of all companies in developed economies and represent 90% of all enterprises worldwide; therefore, it's no surprise that SMEs have been at the forefront of this trend when it comes to business funding. Aside from being able to plug gaps in their cash flow cycles, small businesses also benefit from reduced transaction fees compared with those levied on larger corporations because they don't require as much paperwork or compliance requirements
· Startups are another key component driving up demand for asset-based loans since they usually offer higher interest rates due what is perceived as lower levels of risk associated with their business models
· Supply chain finance has been growing quickly. According to the Revo Supply Chain Finance Index, a benchmark that tracks supply chain finance trends worldwide, the amount of money being advanced by banks in this area has increased by 30% over the last year and is expected to rise even further in 2019.
· This trend is not just restricted to the U.S.; it's happening all over the world. In Europe, where most of these deals are currently taking place on a smaller scale than in America (currently about $1 billion per month) there's still plenty of room for growth as businesses become more aware of this opportunity and start looking at it seriously as an option for financing their inventory costs or working capital requirements.
This is a great opportunity for banks to grow their business. Since supply chain finance deals are typically smaller than other types of corporate loans, the cost of originating them is less than those deals would otherwise require.
Supply chain finance is the next big thing in finance and will continue to grow. Supply chain finance’s importance can be seen across many industries, especially those that rely on complex supply chains. For example, the automotive industry is notoriously dependent on a complex supply chain involving multiple suppliers from both within and outside of their country of origin. This relies upon an efficient system to collect payments from buyers as well as distribute funds between suppliers and sellers. The same goes for other consumer goods industries such as retail and food processing.
In addition to its growing importance, supply chain finance has a number of other benefits. It is an efficient way to manage cashflows while also improving supplier relationships.
The supply chain finance market is growing rapidly and has a lot of potential. It's a relatively new industry, but it offers many benefits to both suppliers and their customers. The best thing about this business model is that it can improve the lives of those in need while also helping businesses grow at the same time.