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SMBs Can Leverage a Large Customer’s Better Credit Through Supply Chain Financing

Like much of the world, Southeast Asian businesses have been hard hit by the Delta variant, including the region’s many ports that are bearing the brunt of supply chain disruptions.

“Because much of the world relies on the goods that flow from these factories and ports, the impact is trickling to other countries,” Gavin Cicchinelli, chief operating officer at PrimeRevenue Inc., said in an interview with PYMNTS.

Under a technology licensing partnership between PrimeRevenue and IFS Capital, which was announced Aug. 24, IFS will offer PrimeRevenue’s platform solutions in its core markets of Singapore, Thailand, Malaysia and Indonesia.

Dual Solutions

The PrimeRevenue platform provides the dual options of supply chain finance and dynamic discounting.

Supply chain finance, Cicchinelli explained, enables buyers to optimize working capital via extended payment terms while also offering their suppliers the option to accelerate payment on invoices.

Dynamic discounting, however, allows buyers to deploy their own liquidity to offer early payment to suppliers in exchange for a predetermined discount on goods purchased from their suppliers.

These options have benefits for both buyers and sellers, large and small.

For suppliers, they provide access to competitively priced financing and the opportunity to shorten their cash conversion cycles.

For buyers, these options enable them to optimize their cash flow through favorable payment terms and stronger relationships with their suppliers.

For large firms, they provide a way to unlock working capital while also injecting much needed stability into the process.

“Supply chain finance keeps supply chains healthy in the face of disruption to maintain business continuity,” Cicchinelli said, “and dynamic discounting offers a solution for businesses to put their idle cash to work in a way that simultaneously helps the buyer and the supplier’s cash flow.”

For smaller firms, the options offered by the PrimeRevenue platform enable them to get cash without relying on expensive sources like commercial lending.

“Solutions like supply chain finance or dynamic discounting allow suppliers the option to choose if and when to accelerate early payment on their own unique cash flow needs,” Cicchinelli said.  “Smaller businesses can leverage their larger customers’ often superior credit rating to get more competitive rates than they would be able to secure on their own.”

For companies of all sizes, the PrimeRevenue platform manages the global payments process. It solves large businesses’ challenges of managing disparate payment platforms and payment terms, and smaller businesses’ operational burden and expense of manual AR/AP processes.

Anywhere In The World

PrimeRevenue’s SurePay platform offers a global, web-based suite of solutions that can be accessed anywhere in the world. “With a diverse network of more than 100 funding partners, suppliers are matched up with a financial institution in their region that efficiently seamlessly facilitates cross-border payments,” Cicchinelli said.

“The mechanics of supply chain finance are very simple,” he added. The buyer onboards their suppliers to the platform, in an automated onboarding process, and then the system begins facilitating early and on-time payments to all suppliers upon buyer approval of an invoice.

“The pandemic and supply chain challenges don’t discriminate between large and small businesses—everyone is feeling the sting from ongoing disruptions,” Cicchinelli said. “The main difference is the resources available for those businesses to respond to challenges.”

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