Payment Extension

Demica’s Payment Extension solution enables corporates to benefit from increased working capital through the extension of supplier payment terms by both parties agreeing an increase in invoice value to reflect the later payment date. The impact on suppliers is mitigated by enabling them to discount the invoice back to the prior invoice term or earlier. Demica arranges the funding for the suppliers and then uses a proprietary technology platform to automate the whole programme. This is a win-win solution: the structure increases the buyer's trade payables as opposed to corporate borrowings and so has no impact on leverage covenants whilst the suppliers can choose to be paid immediately, at a small discount, improving their working capital. 

Want to know more?

If you would like to speak to us about our solutions, please contact:
Karel Krejci

Karel Krejci

Director - Working Capital Solutions

Languages EN CZ FR GE

+44 (0) 20 7450 2547 +420 605 233 612 Monday to Friday, 08:00 to 19:00 Contact Karel

HOW DOES IT WORK?

Demica’s Payment Extension solution is driven by corporate treasury & procurement teams who negotiate an increase in the price of goods sold along with an extension of payment terms with their suppliers. The supplier is able to take payment of the invoice at maturity, take payment in line with historic invoice terms, or request immediate payment at a discount from the funder. Demica’s solution can be structured to meet the buyer’s needs, with the highly customisable solution able to manage gross-ups and then track invoices from pre-approval through to payment. 

Payment Extension programmes can be rapidly rolled out as both the buyer’s and suppliers’ working capital is improved without any detriment to the other party.

The structure is ideally suited to non-investment grade buyers with large, highly rated, suppliers, where supply chain finance may not be feasible.

Funding can be sourced either from a client’s relationship banks or, if diversification is helpful, from Demica’s Investor Partners. 

Demica has extensive experience in managing payment extension programmes, with our platform providing a valuable bank agnostic solution that works seamlessly with other forms of working capital finance such as trade receivable securitisation or invoice discounting. 

With payment extensions agreed with the Suppliers, Demica’s solution automates the discounting and payment of invoices in line with the suppliers' preferences, while the buyer ensures that the payables financing remains off-balance sheet. 

HOW DOES DEMICA DELIVER THIS?

Demica can undertake several different roles in a Payment Extension programme

ARRANGER

  • Access to over 400 global banks, institutional investors, and alternative finance providers 
  • Managing the complete end to end transaction process 
  • With over $3.2bn of payable transactions live, we have a unique understanding of investor appetite 

Advisor

  • Analysis of the buyer’s loan documentation to ensure the programme is correctly excluded from covenant calculations
  • Advice on how to manage negotiations with suppliers
  • Support for the preparation of internal accounting white papers

servicer

  • Advanced technology platform with market leading interfaces
  • Full white-labelling capabilities for funders and corporates
  • Market leading Supplier Onboarding tool, integrated seamlessly into the Supply Chain Finance platform, facilitating an increase in supplier participation by over 25%

THE DEMICA ADVANTAGE

For Corporates

  • Rapid roll out to increase working capital and improve leverage coverage ratios 
  • Off-balance sheet financing
  • Automatic management of gross-up, discounting and payment cycles 
  • Market leading supplier portal for both buyers and suppliers
  • Proprietary onboarding tool to increase supplier participation by 25%

For Funders

  • Full white label solution if required
  • Automatic reconciliation of invoices and payments
  • FX capture through Demica’s FX integrations
  • Opportunities to deploy capital efficiently and in scale 
  • Excellent risk adjusted returns
  • End-to-end programme management 

CLIENT TESTIMONIALS

“Demica worked with our core group of funders to implement a Payment Extension solution. Demica’s understanding of our requirements enabled us capture early payment discounts while swiftly onboarding and extending terms with our core suppliers”

TREASURER 
-- Global Corporate

“Demica have built a highly robust and reliable platform that supports the most complex of supply chain finance programmes. Demica’s expertise and understanding of our business needs are exactly what we look for in a business partner.”

OLIVER PETERSEN
-- ING Commercial Banking

Want to know more?

If you would like to speak to us about our solutions, please contact:
Karel Krejci

Karel Krejci

Director - Working Capital Solutions

Languages EN CZ FR GE

Karel has more than five years experience in supply chain finance and the procure-to-pay application software space, representing tech start-ups to Fortune 500 companies.
+44 (0) 20 7450 2547 +420 605 233 612 Monday to Friday, 08:00 to 19:00 Contact Karel

CASE STUDIES

Illustrating the depth of our client relationships, we have highlighted a few programmes powered by Demica

VIEW ALL CASE STUDIES