Supply chain platform provider GT Nexus and trade finance solutions group Seabury TFX (STFX) are partnering on a new funding programme that leverages big data on the GT Nexus platform to deliver suppliers access to low cost capital.
The programme, announced at this week’s
industry event in Hollywood, Florida, “opens the flow of capital into the supply chain to reduce costs and risk by basing funding decisions on the trading partners’ performance history, instead of the buyer’s or supplier’s credit,” said GT Nexus, which offers a legal framework and compliance engine for business-to-business (B2B) commerce.
“The high performance rate of the overall GT Nexus network of transactions makes it an attractive portfolio for securitisation in the financial markets,” said Robert Lin, STFX’s president and chief executive officer (CEO).
“Unlike traditional programmes working with individual banks or providers on a transactional basis, funding of this programme is secured by a pool of transactions on the platform. The transparency, standardisation, comprehensiveness and reliability of GT Nexus’ big data are critical to ensuring liquidity, and thus enabling healthier and more efficient supply chain finance.”
Buyers and suppliers in this programme are able to remove from the supply chain capital-related barriers that can cause delays or impact customer service.
“This type of programme reduces both cost and risk in our supply chain while improving overall performance,” said Harry Gaffney, chief financial officer (CFO) of Charles Komar & Sons.
“Our suppliers can access funding to run their business when they need it most, at key times within the transaction lifecycle – as early as order. Access to liquidity at crucial points assures the flow of supply goes un-disrupted and improves our customer performance.”
Funding is provided off-balance sheet. Suppliers can obtain cash at the same rate and terms for any qualified buyer on the GT Nexus platform.
The information and communications technology sector is suffering a triple whammy from slower growth, thin profit margins and fierce competition, claims Atradius.
A poll by MarketInvoice also found that relatively few business leaders would consider speaking directly to a bank.
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Trade credit insurer Atradius expects the country to emerge from recession this year, but warns that weak confidence will continue to keep growth subdued.