The value of channel financing is clearer than ever in a world where you can never be sure what’s around the corner, writes Steven Loranger, Managing Director of Peridot Financing Solutions.


Volatility, uncertainty, complexity and ambiguity – aka VUCA: a trendy term that, like other four-letter words, can cause shudders in boardrooms across the world. But there’s no escaping the fact that, even 20 years after it was first used, this acronym neatly sums up the general global picture – especially since the onset of the Covid-19 crisis, not to mention the invasion of Ukraine. Over the past two years, our world has seemed more unsettled than ever.

In a business environment, VUCA (whether caused by the pandemic, geopolitical conflict or other factors) is synonymous with sleepless nights. Supply chains and distribution channels are particularly vulnerable in turbulent times, as the impact of the pandemic has made very clear: widespread disruption to the flow of goods set in almost overnight in 2020, and the effects are still being felt to this day.

Take the technology industry, for example.

Global manufacturers and their buyers saw no problems with demand for many products – in fact, Covid-19 pushed orders to record highs – but they were hampered by supply issues such as a scarcity of materials, workforce interruptions and global delays in the movement of goods. The result? A growing backlog of product orders they couldn’t fulfil, and more and more capital tied up in the supply chain rather than supporting strategic priorities.

For global enterprises facing supply chain and distribution issues – from order backlog and challenges in demand forecasting to low freight availability, rising shipping prices and more – it

can feel like there’s no alternative but to forget the long term and just ride out the storm. But that doesn’t have to be true. With the right working capital financing solutions, it’s possible for buyers and sellers to strengthen their relationships, overcome supply chain and distribution problems, and even use challenging market dynamics to grow their business.


Make your working capital work for you

Smart growth means optimising your working capital. One of the most effective ways to do this is to maximise the value locked in your accounts receivable (AR) – by incentivising your buyers to give more of their bandwidth to your products as well as by optimising cash in both your organisation and that of your customers. That’s where a leading working capital partner like Peridot can have a real impact.

At Peridot, we not only help you get the most out of your balance sheet through true sale of receivables with full transfer of credit risk, but also take the operational headache out of servicing receivables portfolios in dozens of jurisdictions and currencies across the world. By structuring, servicing and financing receivables portfolios, we help customers unlock working capital, increase sales, streamline operations and mitigate risk.

To see the value of these programmes, let’s return to our example of tech companies and their channel partners who struggle to bridge the gap between booming orders and unpredictable supply.

Our receivables financing solution for the sellers gives their buyers the cashflow support they need, with extended payment terms and supports their cash conversion cycles. Support from Peridot means smarter, hassle-free AR management for product suppliers, strengthening their sales and distribution partners – and their balance sheets. Meanwhile, for buyers like distributors and channel partners, our solutions mean better payment terms, enhanced purchasing power, and more flexible lines of credit.

Channel financing programmes also forge a stronger relationship between suppliers and buyers, giving you priority over others when it comes to fulfilling orders and/or making payments. In a time of logistical challenges, these advantages are more valuable than ever.


Stand-out solutions

But you don’t need to be in tech to benefit from our working capital solutions: we’re trusted by more than 1,500 customers – both buyers and sellers – to deliver innovative trade financing solutions, all supported by our best-in-class global technology platform. Today, we apply our 30 years of experience across 59 countries, balancing our in-depth local knowledge with our global perspective. We support our customers with transactions in 25 currencies totalling more than US$60bn in volumes per year.

As a relatively small and extremely agile team, Peridot can work with a flexibility and speed that few can match – but we’re also backed by long-term capital from leading global alternative asset manager Blackstone and other funding partners. The breadth of our credit risk appetite sets us apart: compared to many competitors, Peridot can take a broader chunk of your AR portfolio off your hands, giving you peace of mind and allowing you to focus on growing your business.

In difficult (even VUCA) times, day-to-day cashflow obstacles can make it easy to lose sight of your true growth potential. As many of our customers have found, however, agile working capital financing programmes are an ideal way to turn headwinds into tailwinds.