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Services: Supplier Financing

Are you a product supplier or manufacturing company with growing sales? Have you reached your financing limits but need to build inventory or fulfill large orders? If so, our supplier financing program may be the right solution for you.

Buy raw materials and finished goods

Supply financing is a credit solution designed for both manufacturing companies and product distributors. It enables manufacturing companies to buy the raw materials needed to produce their goods. It also helps product distributors buy products from suppliers.

You can use supplier financing to build inventory or to fulfill ongoing orders. This feature represents an important improvement over other supply chain financing companies that provide funding only after the goods have been delivered.

Our solution is different. It extends credit that enables you to pay suppliers so that your company can deliver big orders. This program is true financing of the supply chain – from the bottom up.

Compatible with your existing financing

An important advantage of our supplier financing program is that it is 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 that our program does not interfere with your covenants.

Available to small and midsize businesses

Most 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 business.

We are different. Our solution is available to small and midsize companies that meet our qualification criteria.

How does supplier financing work?

Our program is very different from conventional supply chain financing programs. We don’t offer financing, per se.

Instead, the program acts as an intermediary between your supplier and your company. When you need to buy goods from your supplier, you issue a purchase order to us. 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 the goods, 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 concludes.

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.

Qualification requirements

The qualification requirements are simple. To qualify, your company must:

  1. Be a manufacturer or product supplier
  2. Be credit insurable by Euler Hermes
  3. Be based in the US or Canada
  4. Sell a minimum of $2,000,000 per year
  5. Have a minimum three (3) years of operations history
  6. Provide accurate financial statements
  7. Have product liability insurance
  8. 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.

Additional resources

To learn more about supply chain financing, read:

  1. What is supplier financing? How does it work?
  2. How does supply chain financing work?
  3. Supplier financing qualification criteria
  4. Supply chain financing vs. factoring
  5. Supplier financing vs. purchase order funding

Need supplier financing?

Are you looking for supplier financing? Fill out this form to have a credit manager contact you immediately.