Supplier financing helps companies that need funds to pay their suppliers. It is commonly used by manufacturing companies that need to pay for raw materials. However, it can also be used by product re-sellers that need help with supplier payments.
This solution works differently from conventional financing solutions. Supplier financing extends trade credit to your company. This credit enables you to pay suppliers so your company can deliver larger orders. This solution can be used alongside your existing financing as long as your lender’s covenants don’t restrict it.
We provide supplier financing to companies in the USA and Canada. If you would like a quote, fill out this form or call us toll-free at (877) 300 3258.
How does supplier financing work?
Our program is different from conventional supply chain financing programs. We don’t offer financing, per se.
Instead, the finance company acts as an intermediary between your supplier and your company. You issue a purchase order to us whenever you need to purchase raw materials. In turn, we provide you with trade credit and issue a purchase order to your supplier.
We pay the supplier according to the terms of the purchase order. The supplier handles manufacturing, production, and delivery of all raw materials, as specified in the purchase order.
Lastly, we send your company an invoice with credit terms for the order. Your company pays the invoice based on the agreed-upon sales terms of the purchase order. Once the invoice is paid in full, the transaction settles.
To learn more, read “How Does Supplier Financing Work?”
How much does supplier financing cost?
We usually mark up the products that are resold to you by 2% to 3% per month. The transaction concludes once you pay us and close the invoice.
Compatible with your existing financing
Our supplier financing program is usually compatible with existing business financing lines. We don’t need a subordination from your lender or need to buy them out. Also, there is usually no need to file a UCC lien to get priority on any of your assets.
However, as a precaution, you should check with your lender to ensure our program does not interfere with your covenants.
Available to small and midsize businesses
Typically, supply chain finance programs are offered only to very large and solvent companies that, in turn, offer accommodations to a select group of their suppliers. Consequently, supply chain financing is not accessible to most small and midsize businesses.
We are different. Our solution is available to small and midsize companies that meet our qualification criteria.
Simple qualification
The qualification requirements are simple. To qualify, your company must:
- Be a manufacturer or product supplier
- Be credit insurable by Euler Hermes
- Be based in the US or Canada
- Sell a minimum of $2,000,000 per year
- Have a minimum three (3) years of operations history
- Provide accurate financial statements
- Have product liability insurance
- Have existing and working relationships with suppliers
The program does not cover labor and other costs
Please note that our program cannot cover other costs, such as labor and production. This program covers only the costs of raw materials or finished goods.
Need supplier financing?
Are you looking for supplier financing? Fill out this form to have a credit manager contact you immediately.
Additional resources
To learn more about supply chain financing, read: