SUPPLY CHAIN FINANCE

Our innovative supply chain finance solutions enable our clients to extend days payable outstanding, capture early payment discounts offered by suppliers or help their suppliers secure lower cost funding, all while improving their own margins. We specialize in non-investment grade programs and those that operate cross-border.

Contact Us
If you would like to speak to us about supply chain finance, please contact
Matt Wreford
— Chief Executive Officer
+44 (0) 20 7450 2566

Overview

The global supply chain market provides $275bn of finance and is growing at 30% a year. Our SCF solutions are optimized to meet the needs of large, non-investment grade clients with cost of sales from $1bn to over $20bn. We have particular expertise in cross-border supply chains. With our uniquely flexible technology platform and innovative structures, we are able to provide a tailored solution to each client that will maximize the return from the program.

 

Structure

The global supply chain market provides $275bn of finance and is growing at 30% a year. Our SCF solutions are optimized to meet the needs of large, non-investment grade clients with cost of sales from $1bn to over $20bn. We have particular expertise in cross-border supply chains. With our uniquely flexible technology platform and innovative structures, we are able to provide a tailored solution to each client that will maximize the return from the program.

 

The Demica Advantage

For Corporates

  • Focus on non-investment grade corporates
  • Expertise in cross-border supply chain finance programs
  • A potential rebate or $600,000 per $1bn of supplier spend
  • Proprietary technology and legal structures that accelerate supplier adoption compared to traditional bank programs

For Funders

  • Opportunities to deploy capital efficiently and in scale
  • Best-in-class risk mitigation systems
  • Excellent risk-adjusted returns
  • End-to-end program management

Supply Chain Finance FAQs

  • How many SCF programs are on Demica’s platform currently?
    As of 31 March 2015, we have 20 cross-border / multi-currency programs live and are growing rapidly.
  • Why do supply chain finance (“SCF”) programs for non-investment grade companies need a different approach to those for investment grade corporates?
    SCF relies on the credit arbitrage that exists between a large, high credit quality buyer and a smaller, lower credit quality supplier. If the buyer is non-investment grade, the proportion of its suppliers where there is no arbitrage increases and the SCF program might need to onboard a thousand or more smaller suppliers to have the same impact. This requires legal structures and technology that are optimized to achieve this challenging task, rather than the manual processes used in traditional bank-led programs focused on the top 100 suppliers.
  • Why have you also focused on cross-border supply chain programs?
    Demica is an expert in global trade receivables finance and has built considerable expertise on the legal and practical challenges of financing multi-jurisdictional programs. With clients partnering with us in over 30 countries and receivables from 130 countries already being financed we are uniquely positioned to meet the challenges and see the benefits from cross-border chains.
  • I’ve heard that supply chain finance programs can be challenging to roll out. Do you agree?
    Traditional SCF programs require the client to coordinate procurement, treasury and IT teams and then persuade suppliers that the extension of payment terms is equitable. Where programs haven’t reach critical mass it is usually because the program champion wasn’t able to resolve the inevitable internal differences of opinion. Demica has launched a new SCF program structure, that leaves payment terms unchanged but shares part of the financing spread with its clients to make it far easier to roll out a program.

Program Services

For 20 years, we have used Demica’s deep domain expertise and continuously improving technology platform to enable our clients to seamlessly meet even the most complex reporting and back-up servicing requirements across jurisdictions.

FIND OUT MORE
Contact Us
If you would like to speak to us about supply chain finance, please contact
Matt Wreford
— Chief Executive Officer
+44 (0) 20 7450 2566