How is New Technologies Enabling the Growth of Supply Chain Finance?

Supply chain finance also known as reverse factoring is a form of financing wherein suppliers can get early payment on their invoices while reducing the risk of supply chain disruption. This type of financing empowers buyers, as well sellers to optimize their working capital. Traditional routes of financing have certain limitations for instance these financing options are reserved for credit-worthy vendors, which leaves others with no cost-effective option. Apart from this, the need for fixing discount rates also creates difficulties during negotiation between vendor and company. Moreover, all the processes are paper-based and time-consuming.

This is where the need for a blockchain technology solution for supply chain financing arises. With a robust technology solution in place, all the parties enjoy a win-win situation. Besides this, vendors are empowered to start their business operations as they now have access to working capital. In fact, these solutions fulfil all the working capital requirements while resolving issues faced by vendor financing programs.