Today’s supplier finance programmes are great at financing the ‘top tier’ of your supply chain. But what about the suppliers further down that chain- your suppliers’ suppliers?
Getting finance to these companies - often the ones who need it most - can be problematic. The invoices against which banks might lend haven’t been well-specified assets and so have been hard to trade and pass around.
Now a new project from Tradeshift’s digital incubation unit, Frontiers, has used blockchain technology to turn invoices from dumb paper to well-specified digital assets which can be traded. Using that in combination with smart contracts, banks can use invoices from global enterprises as collateral to finance suppliers down into tier 2 and tier 3 of international supply chains.
The first ‘live’ invoice was settled through a Smart Contract and licensed digital cash in September 2019 and now Tradeshift expects the concept to impact supplier finance as early as next year.
In this Working Capital Forum webinar, we hear from Citi's Parvaiz Dalal, who will give some background on emerging trends in supplier finance, and Tradeshift’s Mads Stolberg-Larsen, who will explain the ‘how’ and the ‘why’ of deep-tier finance and the value it can bring to the global supply chain.
Take 45 minutes to be among the first to grasp the competitive advantage this new technology can bring to your corporation.