Supply chain financing refers to a number of tools that can help a company with its working capital and financial operation. Here is additional information about how it works.
This article lists the most important requirements to qualify for supplier financing. To qualify for supplier financing, you should:
1. Be a manufacturer or distributor
Supplier financing is designed for and directed at small and midsize companies that either manufacture products or distribute them. Unfortunately, it cannot help companies that provide labor or services. If you are not a product supplier or manufacturer, consider using invoice factoring.
2. Have at least two million dollars in annual sales
We can work with small companies. Your company should have at least two million dollars in annual revenues. We can work with companies that have much higher revenues as well – the two million dollar requirement is only an absolute minimum.
3. Have three years of operations history
Your company must have at least three years of operational history. All of its manufacturing and distribution processes must already be in place and working well.
4. Provide financial statements
As part of our review, we ask you to provide three years of financial statements. You must be able to provide:
- Balance sheet
- Profit and loss statement
- Accounts receivable aging
- Accounts payable aging
- Cash flow statement
Additionally, we may ask for a forecast of future orders.
5. Have product liability insurance
Your company must have a product liability insurance policy. The policy must provide adequate coverage for potential liability events.
6. Have existing supplier relationships
Our program can only help you with your orders to suppliers that have an established relationship with your company. They must have a track record of delivering your materials (or products) on time and according to your specifications. Unfortunately, this program does not cover any new suppliers in your supply chain.
7. Be credit insurable
As part of the operations process, the supply finance company must be able to insure your company with Euler Hermes. Unfortunately, we cannot offer this service to companies that are not credit insurable.
8. Be based in the US or Canada
We can only work with companies that are based in the US or Canada.
Need Supplier Financing?
We are a leading provider of supplier financing and can work with manufacturing companies and distributors in the US and Canada. For more information, fill out this form.