Supply Chain Finance (SCF) is a working capital solution that allows Buyers to optimise their cashflow and enhance liquidity.
Supplier delivers goods or renders services to Buyer
Buyer uploads invoice to portal
Portal provides early payment offer for acceptance
Funding instruction is sent to IFS
IFS provides cash advance of up to 100% of invoice value less interest charge to Supplier
Buyer makes payment to IFS on due date
If any, IFS remits remaining amount to Supplier
How is SCF different from Dynamic Discounting?
- In SCF, IFS provides the financing to the Suppliers. IFS will then receive payment from the Buyer at due date.
- In DD, Buyer makes early payment directly to Supplier. Early payment to Supplier can be funded either entirely by Buyer or together with IFS. IFS provides our platform and know-hows in managing the funding of DD trades.
How does a Buyer benefit from Dynamic Discounting arrangement?
- In DD, the Buyer deploys their own cash to capture discounts, thus generating risk-free returns of greater yield.
- A Buyer who has excess cash can benefit by paying off their Supplier earlier for a discount. This helps to improve the gross margin.
Why do Buyers find SCF attractive to their business in the long run?
- SCF can help Buyers retain their Supplier base by offering cash flow options. A stable supply chain helps in long term planning, ensuring minimal disruption to businesses.