Everything you need to know about Supply Chain Financing

Supply chain finance is essentially the process of financing the production and distribution of goods and services with the help of a third party. Also known as reverse factoring; it enables companies to pay their suppliers early through a cash advance. It can help companies scale and compete internationally as it allows to lower transaction costs for industry participants.

Playing a vital role in the financial well-being of companies, supply chain finance helps protect businesses from the impact of fluctuating commodity prices. Furthermore, businesses can increase efficiency by streamlining the transaction requirements between wholesalers, manufacturers, retailers and end-users. Moreover, it enables manufacturers to continue uninterrupted supply chain processes which results in greater ability to meet market demands.

Many companies use supply chain finance services offered through attested organizations the likes of HNB Finance for their short-term working capital requirements to improve their profitability, reliability and customer retention. It is a cost-effective method of supply chain management for financing manufacturing and distribution processes.

Benefits of using supply chain finance

1. Cash flow optimization

Businesses often have tight budgets and even tighter control over cash flow. To stay ahead in a highly competitive marketplace, most companies must look at all available alternatives to increase their cash flow. That is where supply chain finance comes in.

It is a process that allows business owners to improve the overall financial health of their organization through third-party financial services. Cash flow improvements mean that suppliers will be better positioned to expand their businesses and invest in innovation.


2. Reduce risk

Supply chain finance aims to maximise the return on investment by enabling companies to make informed decisions on where to place their resources. It is a risk mitigation practice that businesses can engage in to optimise supply chain management through increased working capital and liquidity invested in their supply processes and transactions.

3. Strengthen relationships with suppliers

One of the benefits of forming a supply chain partnership is greater brand recognition and trustworthiness when dealing with other businesses. Supplier financing offered from recognised financial solution providers enables businesses to conduct their transaction processes without a hitch, leading to stronger relationships with their suppliers.

4.Increase profitability

Utilizing supply chain financing services can be a source of competitive advantage for businesses, as it can potentially lower operating costs and improve profitability.

HNB Finance is a financial service provider that offers supply chain finance solutions at reasonable rates.

HNB Finance is a financial service provider that offers supply chain finance solutions at reasonable rates.

Why use supply chain financing services offered by HNB Finance

● Specially designed to optimise business cash flow, HNB Finance Supply Chain Finance. model provides the highest credit period in the market with up to 120 days for repayment.

● Benefiting both the buyers and suppliers, this method provides a fast and secure mode of processing payments.

● The island-wide branch network of HNB Finance makes it convenient for customers to access the facilities from wherever they are.

Requirements to obtain the services

● A duly completed and signed application form
● Copy of the company registration certificate
● NIC copy of business owner/director
● Last six months bank statements and any other proof of income
● Previous three years audited financial reports
● Any other additional documents related to the business