Imported from the Anglo-Saxon business environment under the name of supply chain finance (SCF), supply chain finance is a relatively new practice in Spain, but it is gaining more and more ground in the mid-cap segment. mid cap segmentsegment, together with other alternative financing methods such as factoring and confirming.
It allows companies to optimize payment to their suppliers through financial technology tools, ad hoc digital platforms that allow the buyer to offer a financing option to its suppliers, who can manage and advance the collection of their invoices.
The advantages of this type of financing are obvious. The purchasing company, in addition to obtaining an improvement in working capital, is able to offer financing capacity directly to its suppliers, thus improving its payment planning. As for the supplier, it obtains a digital tool that allows it to easily consult the status of the processing of its invoices and to manage the financing of these invoices personally in a much more agile and intuitive way.
SCF solutions are part of a new generation of financial services characterized by the use of the latest technological innovations. Where before companies could only resort to the know-how of traditional managers to obtain financing or better business management, there are now all kinds of tools that complement and improve these services through technologies such as big data, artificial intelligence or blockchain.
These tools have made a difference during the COVID pandemic, which strained the supply chains of many companies due to the restructuring of global trade, sanitary restrictions and bottlenecks in the flow of goods. According to a study by S&P Global Market, profits in the SCF sector grew by 4% during 2020, with a particularly relevant weight in the European and US markets.
Thanks to IT-based solutions, alternative entities are challenging traditional banks for hegemony in the field of global supply chain finance, as more and more companies opt for the flexibility and customization that services such as dynamic discounting orpeer-to-peer (P2P) lending allow. This is why it is estimated that this smart financing modality will continue to grow in the near future, integrating itself into the supply chains of medium-sized companies and pushing traditional banks to adapt to the digital revolution underway in the financial sector.
