October 2017 by Darren Davies
The ability to offer longer terms of sale for customers and create shorter payment terms for suppliers continues to be a growing competitive advantage for both large and middle market corporates in North America and Europe. Several of Finacity’s clients are applying receivables securitization (a proven method of accessing the capital markets) as a means of extending payment terms to their customers. As middle market corporates have increasingly larger individual customers, this not only presents a financing opportunity, but also a way to include extended terms as a means of winning and retaining key customers. Maersk seeks role in trade finance as banks retreat is an example of where these dynamics are visibly in play for a large multinational. Finacity clients in a variety of sectors Finacity Case Studies including manufacturing, industrial supply, chemicals, agribusiness and professional services are tapping into data rich receivables and payables portfolios as a means of cost effectively leveraging these opportunities with minimal resource allocation.
In a related trend, middle market corporates are also looking to their payables portfolios as a means of creating economic value (from what has been traditionally viewed as a cost center) by monetizing their relationships with key suppliers. The growth trends in supply chain/payables finance are often contrasted with the challenges inherent in applying larger company solutions to the middle market. Supply chain opportunities in the middle market. Finacity’s core competencies in data aggregation at the invoice level, security, onboarding and batch credit scoring provide a distinct advantage in helping clients of all types, especially middle market corporates, realize the advantages inherent in leveraging the supply chain and enabling an additional source of capital markets funding through the receivables portfolio. Large and middle market corporates are being prompted by a cyclical combination of industry-specific challenges and macro-economic trends to offer longer terms of sale for strategic customers and shorter payment terms for key suppliers. Finacity is actively exploring these challenges and opportunities with our clients around the world.