How Supply Chain Financing can fuel your businesses growth?

August 7, 2019

Entrepreneurs rarely get into business dreaming of small enterprises. The dream is always to grow bigger and to thrive in competitive environments. However, in challenging economic scenarios, small businesses fight hard only to survive, let alone thrive.

Growing a business is a combination of proper planning, excellent timing, and execution. Sound financial management becomes either a roadblock or the magic potion to successfully scaling up businesses.

A business with prudent financial management has the liberty to pursue growth on its terms. Funds become a critical element to develop and execute successful growth strategies. While there are several means to obtain such alternative financing, Supply Chain financing is a secure means to access and benefit from to drive growth.

Supply Chain Financing can be an effective means to gain better control of finances

1.      Flexibility and Timely access to funds

SCF offers much-needed flexibility to a firm on when and how to utilize its funds to manage ongoing operating expenses better. By using supply chain financing to access timely funds for regular operating costs, working capital otherwise set aside for this purpose can be reinvested. Timely access to funds brings about stability in current operations which is necessary to build a strong foundation for growth

2.      Better utilization of resources

No more spending time on following-up or chasing payments from. Small businesses often spend limited resources in redundant manual efforts of following up for payments and reconciliations with large customers, which consume valuable time, effort, and resources. With supply chain financing through digital platforms such as Cashinvoice, businesses can avoid such wastage of efforts. Instead, precious resources of small businesses can pursue growth opportunities that will be more profitable for the company in the long run

3.      Improved business operations

Since supply chain finance is linked to goods traded, inventory management for small businesses become much more efficient. Efficient inventory management further improves stability in sales and cash flow management for businesses. Stability in current operations builds a stronger foundation for growth.

4.      Negative Cash conversion cycle

Companies can aim to achieve a negative cash conversion cycle of having to pay their suppliers only after collecting cash for onward sales. By adopting supply chain financing to get paid immediately through invoice financing while ensuring that suppliers have access to similar funds through financers. A negative cash conversion cycle can benefit small businesses exceptionally well as well for upfront investment is not required to deliver on orders.

5.      Improved access to capital

Financial Institutions funding small businesses through the supply chain often gain better insights into the business transactions and their creditworthiness. Thereby offering further access to capital to seize growth opportunities when they present themselves.

It is only prudent that businesses leverage their supply chain effectively to grow bigger and better