PrimeRevenue has announced a supply chain finance (SCF) partnership with Advance Global Capital (AGC) as part of an attempt to offer corporate clients a greater and more diverse range of SCF programmes.
AGC will finance SCF programmes under the partnership whilst PrimeRevenue will structure, implement and manage them. Under the partnership’s first initiative – the Advance Trade Growth Fund (ATGF) – over US$ 1mn in cash flow has been provided to Mexican manufacturer Inmagusa, which supplies metal components to Navistar, the US-based car manufacturer.
“Our investment allows Inmagusa to receive payment of its invoices up front, freeing up its cash flow to purchase raw materials and pay employees,” says portfolio manager at AGC Nate Hartley.
CEO of AGC, Admir Imami, adds: “The relationship with PrimeRevenue enables us to achieve efficient geographic and industry diversification, and PrimeRevenue can access an additional source of liquidity. Discussions have already begun to expand the success of the Inmagusa-Navistar financing to additional suppliers across the globe.”
PrimeRevenue has over 50 funding partners, yet according to a spokesperson at the firm, the partnership with AGC stands out as one with a non-bank, which offers different benefits and new opportunities for corporates engaging with SCF.
SCF capacity from capital markets is 85-times larger than from banks, the spokesperson tells GTR, adding that a greater emphasis on funding and liquidity ratios as a result of Basel III is a further reason to favour non-banks when structuring SCF programmes.
“With non-banks, funding is not based on relationship or cross-selling opportunities, but only on the buyer’s credit and risk tenor,” says the spokesperson. “As a result, pricing is transparent and market driven. Funding decisions can be achieved within days, sometimes hours, rather than weeks.”
By partnering with non-banks, the spokesperson says PrimeRevenue can offer corporates a larger pool of funding options. “Corporates want to diversify their pool of funders to make sure their SCF programmes have a long-term capacity,” the spokesperson tells GTR.
Expecting to partner with more non-banks in the future, the spokesperson adds: “We have a very good market environment where these non-bank funders want to get in, but they don’t have the access to deals. In this partnership with AGC, we provide the assets and they provide the funding.”