Following a deluge of shocks to global supply chains, treasurers are searching for ways to build greater resiliency into their supplier relationships. SCF, enabled by progressive regulation and digital tools, offers benefits to both corporate buyers and their supplier base.
The proliferation of black swan events in recent years, including the Covid-19 pandemic, the climate crisis and the war in Ukraine, have had tangible impacts on corporate supply chains – from a shortage of raw materials to the drastic increase in energy prices. This has served to underline the importance of resilient supply and value chains.
SCF – referring to reverse factoring rather than wider supply chain finance tools – is a crucial building block for securing sustainable and diversified international value creation, so it is perhaps no surprise that utilisation of this tool is rising among corporates worldwide.
Jacqui Kirk, Head of Trade and Supply Chain Finance, EMEA, Global Transaction Services (GTS), Bank of America, comments: “Our own book has seen continued growth, driven by new programmes being set up and an increase in suppliers joining the established programmes in place. Suppliers see this as an important tool giving them access to liquidity, often at lower rates than they can otherwise achieve.”