What Is Supply Chain Finance?
Financing arrangements that optimize cash flow across the buyer-supplier relationship.
Detailed Explanation
A buyer's bank or platform pays the supplier early at a discount, and the buyer repays later at the original due date. Benefits both parties by leveraging the buyer's credit rating.
Example
A retailer enrolls in supply chain finance so small suppliers get paid in five days instead of waiting Net 60.
Why It Matters
Strengthens the supply chain by giving suppliers faster access to cash without straining buyer liquidity.
Related Resources
Related Business Terms Terms
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