Supply chain funding
Pay your suppliers now, settle on your terms.
Extend your terms while suppliers are paid early. Suits a business with regular supplier payables that wants to keep its own cash in the business.
You don’t pay to compare.
No credit file impact · No cost to compare · No obligation
Supply chain funding at a glance
- Amount
- Programs from $100,000 to $10,000,000+ in monthly payables
- Term
- Revolving; terms extended by 30, 60 or 90 days
- Security
- Typically a General Security Agreement registered on the PPSR
- Time to funds
- Varies by lender
- How you pay
- You pay the funder the full invoice on your extended terms
Indicative, and subject to lender assessment. Your options are typically ready within 24 hours of receiving your documents.
Is it right for you?
When supply chain funding fits, and when it doesn’t.
Often fits
- Longer terms with your suppliers, up to 90 days
- Suppliers who’d value being paid early
- A supplier base you can run through one program
- You’d rather not use your own cash to pay suppliers early
Usually not
- One purchase order or shipment, where trade finance may fit
- Supplier payables under around $100,000 a month
Business funding, compared on real data, in three steps.
How It WorksCompared
Trade Funding or paying suppliers early yourself?
| Trade Funding | Self-funded | |
|---|---|---|
| Working capital | Funded by a third party, your cash stays put | Your own cash pays suppliers early |
| Lender access | Panel of 70+ lenders compared | No panel, no comparison |
| Supplier reach | Platform-based, scales across your supplier base | Manual, case-by-case arrangements |
What it costs
How you pay, and what it costs.
- Program fee
- Typically 1% to 3% of invoice value, depending on your credit profile, the extension and invoice volume
- Who pays it
- Taken as the discount when your supplier is paid early
- Other fees
- There may also be platform or facility establishment fees
Program cost calculator
See both sides of the transaction.
Your suppliers are paid early on invoices you’ve confirmed, at a small discount. You settle with the funder on your extended terms. Adjust the slider for an indicative split.
- Fees shown are indicative; your report shows each lender’s fees.
- Results are approximate. Not an offer of credit.
- Paid to supplier
- $490,000
- Program fee
- $10,000
Illustrative only, assuming a 2% program fee per invoice, taken as the discount when your supplier is paid early. You pay the funder the full invoice on your extended terms. Your Compare Report shows the exact fee and terms each lender offers your business.
Questions about supply chain funding.
What is supply chain finance and how does it work?
Supply chain finance is a set of financing solutions that optimise cash flow across your supply chain. In a typical arrangement, you (the buyer) confirm supplier invoices on a technology platform, and a funder pays the supplier early, often at a small discount. You then repay the funder on extended payment terms. Suppliers get paid faster and you extend your own payment terms and preserve working capital. It’s sometimes called reverse factoring, because it’s initiated by the buyer rather than the supplier.
What is the difference between reverse factoring and supply chain finance?
Reverse factoring is a specific type of supply chain finance where the buyer arranges the facility and invites suppliers to participate, with suppliers choosing whether to take early payment on confirmed invoices at a discount. Supply chain finance is the broader term, and can also include dynamic discounting, inventory finance, and pre-shipment finance. In practice, the two terms are often used interchangeably.
How do suppliers benefit from supply chain finance?
Suppliers are paid early on confirmed invoices, instead of waiting the usual 30, 60 or 90 days. Because pricing is based on the buyer’s credit rating rather than the supplier’s, suppliers access funding more cheaply than they could arrange independently, and improve their cash flow predictability and days sales outstanding (DSO) along the way.
What does supply chain funding cost?
Program fees typically range from 1% to 3% of invoice value, depending on your credit profile, the length of the payment extension, and the volume of invoices run through the program. There may also be platform or facility establishment fees, which are often offset by the payment term extensions and early payment discounts you capture as the buyer.
How do we get paid?
Comparing costs you nothing. Not comparing can cost you plenty.
The headline rate rarely tells the whole story. Fees, charges and loan terms can add far more to what you repay. That’s why your Compare Report shows every cost we can identify side by side.
In most cases, the lender pays us, and only if you decide to proceed with their product offer. For more complex deals, or where the lender pays us little or nothing, we may charge a fee for our service. It doesn’t happen often, but when it does, it’s shown on your Compare Report and we’ll walk you through it before you decide.
No obligation to proceed, ever.
Related
Read more, or compare a different product.
Guides
See your options, side by side.
No credit file impact · No cost to compare · No obligation
Or talk to us: 1300 161 641 · support@tradefunding.com.au