Dynamic Customer Finance: Supply Chain Support for the Covid-19 Age

Amid the pressures of a global pandemic – and the rise of sustainable finance – Jan-Martin Nufer, Vice President Treasury & Funding, Borealis, has collaborated with working capital giant C2FO to create a dynamic customer financing solution to supplement their C2FO dynamic supplier finance solution. As Nufer and Colin Sharp, SVP, EMEA, C2FO, explain, this innovation enables treasurers to strengthen customer relationships by accelerating, or extending, timelines for outstanding receivables – to suit both supplier and buyer. Intrigued? So are we!

Eleanor Hill, Editor, TMI: Before we talk about this exciting new financing solution, let’s touch on the pandemic. How did Borealis’ treasury and funding team cope with the market disruption caused by Covid-19?

 Jan-Martin Nufer (JMN): Like previous crises, the pandemic led many businesses to focus on risk management – especially around liquidity, working capital, and supply chain stability. This was no different for Borealis. As soon as Covid-19 was declared a pandemic, we implemented an overarching cross-functional programme to ensure that we could stay on top of the uncertainty caused by the virus.

This programme was built on a framework we had created after the financial crisis of 2008 – with the aim of minimising the impact of any future market disruption. Similar to our financial crisis response and notwithstanding an already extremely solid basis, we ensured additional cushions of committed liquidity were available and made use of the proven diversification strategy in our funding set-up.

We concentrated primarily on the funding avenues that were least impacted by market disruptions – as seen temporarily in the debt capital markets, for example. We closed a large 300m EUR foreign investment financing deal with the Austrian export credit agency OeKB, and a 250m EUR long-term research and development [R&D] sustainable financing arrangement with the European Investment Bank [EIB]. Like many other companies, we have also been exploring the government-driven Covid-support schemes offered in various countries.

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