As companies struggle to find liquidity in tough markets, supply chain finance (SCF) solutions are becoming more popular, according to SCF provider PrimeRevenue.
The firm reports that in the six months ending September 2008, approximately 300 new suppliers have been added to its online SCF platform, amounting to a volume of US$5.8bn-worth of business.
Not including these new suppliers, payments processed by PrimeRevenue from its founding in 2004 to September 30, 2008, total US$36bn.
Since last August, supplier-initiated receivables sold via the PrimeRevenue solution grew by approximately 40%.
Commenting on these results, PrimeRevenue CEO Joe Juliano says: “Working capital finance is the lifeblood of modern commerce. Today, its flow is severely constricted. It is critical for companies to have flexible, reliable and available access to cash when needed – which is exactly what our supply chain finance platform delivers.”
He adds: “Our substantial growth over the past few months is a direct consequence of increased strain in the credit markets. Companies are telling us that they see supply chain finance as a complement to existing working capital facilities, or as an outright replacement to those that have been removed.”
PrimeRevenue’s SCF Platform is an online network that links global companies to their suppliers and third party financial institutions in a secure web environment. It is designed to allow suppliers to access financing based on the credit risk profile of the larger buyer. In this way it aims to increase the availability and drive down the cost of financing for suppliers, and reducing the cost and financial risk throughout the buyer’s supply chains.
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