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.
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
Supply Chain Finance FAQs
As of 31 March 2015, we have 20 cross-border / multi-currency programs live and are growing rapidly.
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.
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.
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.
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