Supply Chain Finance: Payables Finance & Discounting

Supply Chain Finance | Payables Finance, Dynamic Discounting, Distributor Programs

Supply Chain Finance

We structure and place supply chain finance programs that convert approved payables into predictable early payments for suppliers. The anchor is the buyer’s credit. The output is a lender ready framework with clear approvals data, enforceable assignment, and a claims path that funders accept. Programs can run on bank rails, fund platforms, or a hybrid model.

Snapshot: Buyer anchored programs from 25 million to 500 million annual early payment volume. Tenor up to invoice due date with optional extensions. Suppliers paid T+1 to T+3 after approval. Pricing set off buyer risk and expected loss. Non recourse to suppliers. Works alongside our How It Works overview and our Procedure.

What Financely Delivers

  • Program design that maps approval events to funding and settlement without gaps.
  • Underwriting memo for buyer risk, legal enforceability, and data integrity tests.
  • Documents that pass credit review. Purchase and assignment terms, true sale where required, notices, and collections mechanics.
  • Capacity placement with banks and funds. Optional confirmations or insurance for weaker jurisdictions.
  • Supplier onboarding playbook. KYC flows, pricing schedules, and communications templates.
  • Reporting and guardrails. Concentration caps, dispute handling, and change control for ERP or workflow updates.

Program Modules And Reference Terms

1. Payables Finance

  • Use early payment to suppliers against buyer approved invoices.
  • Risk buyer risk only once approval is final and irrevocable.
  • Funding daily batches. Settlement on due date from buyer to funder.
  • Economics discount from approval date to due date on a money market basis.

2. Dynamic Discounting

  • Use buyer uses own cash to fund early payments when rates or liquidity favor it.
  • Switch waterfall between buyer cash and external funders.
  • Pricing sliding scale set by days to due date.

3. Distributor And Dealer Finance

  • Use extend terms to resellers without bloating receivables.
  • Mechanics funder pays seller at shipment. Dealer pays funder at extended due date.
  • Controls limits per dealer, stop ship flags, and performance tests.

4. Inventory And Pre-Shipment

  • Use fund inputs or finished goods tied to firm POs.
  • Risk short tenor with control of title and logistics evidence.
  • Exit conversion into receivables funded under the main program.

Underwriting And Risk Controls

We score each program using our F TFRS framework. PD is anchored to the buyer’s credit and jurisdiction. LGD is driven by documentation strength, assignment enforceability, data integrity, and dispute controls. We do not rely on marketing claims. We test real approval data, sample invoices, and dispute history before we place capacity.

  • Data integrity immutable approval events and audit trails from ERP or workflow.
  • Assignment clear notice mechanics and no offset after approval except defined disputes.
  • Concentrations caps by supplier, site, and category. Country and currency limits.
  • Disputes hard cut offs. Separate commercial disputes from credit events.
  • Optional credit wraps confirmation or insurance for weaker issuers or jurisdictions.

Pricing And Economics

Component Reference Range Drivers
Discount Margin SOFR or EURIBOR plus 120 to 350 bps Buyer rating, tenor, country, documentation quality
Program Fee 10 to 40 bps of early payment volume Onboarding scale, reporting, number of suppliers
FX And Settlement Spot or pre-agreed bands Currency mix, netting, and rate evidence requirements

Ranges are indicative. Final terms depend on buyer credit, legal enforceability, data quality, supplier mix, currencies, and funding route.

Eligibility And Data Room

Item Details
Buyer Profile Financials, rating or internal view, jurisdiction, and covenants
Approval Data ERP extracts, event timestamps, reversals, dispute codes
Supplier List Top suppliers, terms, countries, volumes, and tax IDs
Legal Pack Form of purchase and assignment, notices, and collection account
KYC Corporate documents, UBO, sanctions checks for buyer and SPVs

Supplier Onboarding Flow

1. Invitation And Terms

Buyer invites suppliers. Pricing schedule and early payment rules are shared. KYC starts.

2. KYC And Account Setup

Suppliers complete KYC. Settlement accounts are verified. Notices prepared for disclosed models.

3. Go Live

Approved invoices flow to the funder. Suppliers request early payment. Cash is received T+1 to T+3.

4. Review And Scale

Concentrations and dispute rates are reviewed. Pricing bands and supplier limits are adjusted.

Implementation Timeline

Weeks 1 to 2

Data room intake. Legal scoping. Funding route decided. F TFRS scoring completed.

Weeks 3 to 4

Documents drafted. ERP extracts tested. Pilot supplier cohort identified.

Weeks 5 to 6

Capacity allocated. Notices issued. First early payments executed.

Week 7 onward

Scale across suppliers. Tune pricing and limits. Quarterly reviews with funders.

Fees

  • Underwriting retainer USD 59,500 at mandate. Credited against closing fees.
  • Success fee at signing of capacity. Sized to program volume and structure.
  • Ongoing costs discount margin and program fee per the pricing schedule.

Frequently Asked Questions

Is the program non recourse to suppliers?
Yes after buyer approval is final. Early payments are purchases of receivables. Recourse sits with the buyer on due date unless a defined dispute applies.
Do we need a platform to run this?
Not always. Banks can run file based flows. Platforms help at scale for onboarding, pricing, and reporting. We support both routes.
What data do funders require?
ERP approval events, invoice and supplier master data, reversals, and dispute logs. Funders will test samples and seek evidence that approvals cannot be altered without audit trails.
Can we combine dynamic discounting with external funding?
Yes. A simple waterfall uses buyer cash first within limits then switches to external funding. Suppliers see one set of rules.

Request Supply Chain Finance Terms

Share buyer financials, ERP extracts, supplier list, and your target start date. We will return a funder map, pricing bands, and a go live plan.

Request Terms

Financely acts as an advisor and arranges capacity through regulated partners. We do not custody client funds. All engagements are subject to underwriting, KYC, AML, sanctions screening, legal review, and final approvals by funding counterparties and insurers. This page targets professional clients and eligible counterparties only.

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Submit your deal using our secure intake form, and receive a quote within 1-3 business days. Existing clients can connect with their relationship manager through our secure web portal.


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