It’s no secret that the COVID-19 pandemic and other local and global factors have led to unprecedented supply chain disruptions impacting every industry around the world.
Professionals in the space know that even though the supply chain wheels might not be turning as fast, that does not stop the money from burning fast, and are looking to innovate in supply chain finance as a means of optimizing SCM.
Securing financing will benefit companies struggling in the here-and-now to recover from business disruption caused by pandemic shutdowns, labor shortages, inflation, and other factors.
But is supply chain finance the right option for every business? What should businesses know about supply chain finance before leveraging it? We reached out to a panel of finance professionals, supply chain professionals, and business leaders and asked them to answer this question:
Their answers are endlessly varied and even more valuable. Read on to learn ideas from industry leaders that can help set you up for SCM success today, and prepare you for SCM challenges of tomorrow.
Meet our panel of finance professionals, supply chain professionals, and business leaders:
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Maxim is the Head of Investment Research at Freedom Finance Europe, a subdivision of Nasdaq-traded Freedom Holding Corp. His work has been published in Business Insider, Nasdaq, U.S. News, Financial Express, Kiplinger, The Next Web, and The Diplomat.
Supply chain finance is one of the most important tools that can help SMEs (small and medium enterprises) tackle supply chain issues in an efficient manner. This form of finance enables businesses to not only stabilize their own financial position but also that of their supply partners, helping them to ensure that capital is free to aid growth.
The practice itself is essentially suppliers lending money on the strength of invoices a buyer has pledged to pay. The supplier either receives stronger credit terms or agrees to a discount being paid sooner.
Demand for supply chain finance grew throughout the COVID-19 pandemic, as impacted companies sought out more ways to secure their liquidity.
However, S&P warned of a ‘sleeping risk’ caused by poor financial disclosures obscuring a company’s underlying health.
With this in mind, businesses must remain vigilant about accepting supply chain finance. However, it must be regarded as an excellent approach for SMEs to continue functioning in an efficient manner during a period as challenging as the ongoing health crisis.
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