Supply Chain Finance / Dynamic Discounting
A win-win situation for you and your suppliers
Supply chain finance enables a company to obtain more favorable purchase prices. At the same time, suppliers gain access to the more favorable financing of the supplied company. Both sides gain advantages, which is why more and more companies are using these solutions.
The two ways in which the supplier and the supplied company achieve benefits at the same time
1. Dynamic Discounting: The purchasing company uses its own money to pay the supplier in advance. In this case, the discount is granted by means of dynamic discounting, i.e. based on graduated rates, so that the time at which the supplier demands payment directly influences the amount of the discount.
2. Supply Chain Finance in the narrower sense: The second option uses the relationship of the (usually larger) purchasing company with a credit institution. The company guarantees payment to the bank. In this way, the supplier can benefit from the larger company's better credit rating and obtain the working capital loans it needs on more favorable terms than from its own bank.