Business benefits for Buyers’ using BSCF:

  • Additional working capital, cash flow gains and shareholder value added
  • Opportunity to increase payment terms (à better cash position)
  • Increase in sales and enhance supplier relationships
  • Off-balance sheet financing (trade payable, not bank financed)
  • Costs will be taken by suppliers
  • Reduce operational costs due to streamlined processes

Business Benefits for suppliers using BSCF:

  • Additional working capital, cash flow gains and shareholder value added
  • Get cash earlier to pay its suppliers
  • Change short-term receivables into liquidity
  • Alternative financing of delivery period
  • Does not affect line of credit
  • Favorable financing/interest rates
  • Opportunity to offer longer payment terms

 Business Opportunities for the Bank

  • Large market with good growth potential: Supplier finance opportunities exist in multiple sectors, including:  Schools, FMGs, Logistics, Hotels, Retail Chains, Health Insurance, Hospitals, Pharmaceuticals, Manufacturing, Security, Petroleum, Airlines Construction, sugar, coffee, fruit, vegetables, and flowers.
  • Improved credit risk: Supporting suppliers to implement best practice and governance standards will enhance risk management, operational efficiency, and increased profitability, reducing financial liabilities the bank.
  • Attractive financing niche: Supplier demand for finance is already there and the involvement of buyers reduces collateral risk, which further enhances the attractiveness of these deals.
  • Improved customer service: Finance is essential to help suppliers produce a better quality product that meets buyer eligibility requirements. Benefits for the Bank come from building competitive supplier businesses, which adds to portfolio returns.
  • Provision of efficiency gains among clients to create growth potential, leading to an expanded need for banking services.
  • Market differentiation: Banks well-acquainted with the specificities of the sustainable supplier market and offering value-adding financial services in this area can extend their market reach in a highly competitive SME market.
  • Increased brand value: The Bank can enjoy the reputational benefits of supporting businesses with high operating standards among policymakers, investors, and customers.
  • Very Profitable: Lending to corporates at a rate more than on traditional lending and at the same time lending to SMEs the bank would otherwise not have lent because of their poor credit quality.