Supply Chain Finance: Optimize Working Capital Management
Supply Chain Finance (SCF) is quickly becoming a popular strategy to optimize working capital management.
With many small and medium sized enterprises (SMEs) still recovering from the crippling blow dealt to the global financial system a decade ago, Paygevity SCF offers a “win-win” solution for corporations and their vendors struggling to find balance.
Supply Chain Disruption
In 2008 the Federal Reserve implemented new regulations, banks tightened lending standards and in turn, corporations were forced to implement new strategies to improve access to working capital cash trapped in the supply chain.
Ignoring fears of disrupting their supply chain, corporations started extending their days payable outstanding.
Before long unilaterally extending vendor payment terms became status quo.
Benefits to Vendors
Paygevity’s SCF program benefits vendors:
- Get paid immediately at low discounts
- The low discount is less expensive than interest charged from a factoring loan arrangement
- Discount primary based on buyer’s strong short term credit profile
- Vendors gain freedom from a host of high interest rates, liens, and personal guarantees
- Vendor participation is 100% voluntary
- At opt-in, vendors maintain option to accelerate payment on a portion, all, or none of their invoices
Paygevity’s SCF program is committed to customizing solutions that fit the working capital goals of corporations and their vendors.
With Paygevity’s SCF program corporate buyers can extend days payable while granting vendors immediate access to their cash at a small discount.
Paygevity is committed to fostering growth and innovation at large corporations and their vendors. Are you?
Authored by: Dr. Gerrit Kuijt, PhD, M.D.
Dr. Kuijt serves as Paygevity’s Chief Business Development Officer and leads the corporation’s strategic growth initiatives globally. Concurrently, he is completing an Applied Economics PhD (his second PhD) at Antwerp Management School. Prior to joining Paygevity, Dr. Kuijt served as Vice President of Business Development and Chief Medical Officer at Avant-garde Health. A former military surgeon and Lieutenant Colonel in the Royal Dutch Army Reserves, Dr. Kuijt attended Valparaiso University where he studied physics—ultimately earning his medical degree from Erasmus University and a PhD in Clinical Medicine from Maastricht University. Dr. Kuijt is a graduate of Harvard Business School’s Program for Leadership Development—an accelerated alternative to an executive MBA designed for specialists and star contributors.