Supplier FinancingFully digitised solution frompre-shipment to the payment

Market trends & challenges

Buyer-clients need a sustainable and well-funded, low risk supply chain that grows with their business. Key to that is the access to liquidity across the supply chain from large, medium and small suppliers.

Standard Chartered’s Supplier Financing solutions lead the industry in short-term commercial finance. We provide financial solutions to buyer-clients to enable funding to their suppliers upfront for invoices and verified purchase orders. Many suppliers face problems obtaining affordable liquidity early in the procurement process. Traditional trade finance solutions for suppliers can be hard to obtain, costly and come with heavy credit conditions. Not to mention the inefficiencies of paper-based processing adding time to the approval process.

By fully understanding a buyer-client’s procurement process and key challenges, our solutions adopt a holistic view to cater financing needs to suppliers at all stages of the trade cycle. This helps to maintain sustainability in the procurement cycle and builds confidence with the buyer-client and its counterparts. It allows companies to continuously accept unusually large orders hence assuring a steady flow of goods to support expansion plans.

Standard Chartered’s Supplier Financing solution truly covers the buyer-clients’ entire procurement cycle from pre-shipment to invoice payments.

Help your suppliers by giving them access to the financing they need to keep their day-to-day operations running smoothly.

Creatingvalue for buyer-clients

Benefits

Impact

Early liquidity forsuppliers

Optimise payment terms

Ensure a stable supply base

Lower procurement cost

Strengthen supplier

relationships

Boost supplychain efficiency

Reduce reliance on traditional bilateral

funding

Competitive ratesfor all suppliers

Fast digitaltransactions

Standard Chartered can offer suppliers a solution covering their financing needs starting from the pre-shipment phase. We enable our clients to support their suppliers getting Integrated access to funding at different stages of the trade cycle.

solution Through our relationship with the buyer-client and our unique footprint, we are one of the from PO few banks that can provide a supplier financing programme that covers the pre-shipment

to post-acceptance phases.financing to payablesfinancing Flexible solutions

Mix and match our various Supplier Financing solutions for a programme that best meets your needs

• PO Financing • Trade Payables Management • Invoice Financing • And more... • Receivables Discounting • Vendor PrePay

Traditional supply chain finance solutions focus on post-shipment stage, where suppliers will receive financing after the invoice is accepted. Some suppliers, Seamless solutions Flexibility to particularly the smaller ones, may need working capital at an earlier stage to fund

Seamless conversion of pre-shipment finance obligations to customise the production, warehousing and transportation of the goods. post-shipment ones based on your supply chain triggers solutions to Our advanced systems enable us to combine various trade financing solutions into • Automated and scalable • Fully digital experience via

a Supplier Financing programme. Purchase orders will be automatically matched solution our proprietary Straight2Bank meet your with corresponding invoices and funding will be seamlessly disperse to the • Multiple integration options platform for key aspects needs suppliers at different stages of the procurement cycle. • Minimised errors including transaction initiation,

monitoring and settlement For example, by combining a Vendor PrePay solution together with Purchase Order (PO) Financing in the pre-shipment phase into a Supplier Financing programme, our buyer-clients will be able to support their suppliers’ funding needs at an Self-liquidation solutions earlier stage. This helps to strengthen their relationships with critical suppliers

Pre-shipment obligations to be liquidated with proceeds and ensure a more sustainable supply base. from post-shipment finance

Liquidation options: 1. One-to-one 2. First-in-first-out Every PO is matched to its Proceeds from every discounted invoice corresponding invoice will liquidate the PO maturing the earliest

Integrated supplier finance programmes

Pre-shipment Post-shipment, pre-acceptance Post-invoice acceptance

Inv

Buyer-client Purchase order Sourcing Production

submission of goods of goods Shipmentof goods

Invoice Goods in submission transit

Deliveryof goods

Invoice Paymentapproval at maturity

Purchase Order Financing Receivables Financing Export Invoice Financing Vendor PrePay

Trade Payable Management

End-to-end coverage

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A multinational company (MNC) awarded a large order for electronic parts to a Chinese supplier. Case study Due to inadequate capital, the Chinese supplier is unable to buy raw materials for production. The supplier has considered getting a traditional bank loan. However, the bank loan’s interest rate is high and it may take a long time for the loan to be approved. The inability of the supplier to obtain financing may create potential supply chain disruption which will impact the MNC’s production.

Standard Chartered partners the MNC to structure an integrated supplier finance solutions that helps unlock the MNC’s trapped working capital and increase liquidity options for the supplier to stabilise the supply chain.

The Chinese supplier obtains Purchase Order (PO) financing at favourable financing terms though an automated process early in their procurement phase. After the Chinese supplier shipped the parts to the MNC, the outstanding PO financing loans will be paid automatically by the pre-payments from the Vendor Prepay solution.

This programme builds and strengthens a sustainable and collaborative relationship between the MNC and its key suppliers.

Improve supply chain health by providing suppliers with easy access to liquidity.

Our solutions Identifies key nominated suppliers to support

supplier pre-shipment and post-acceptance financing needs.

Suppliers submit POs for financing toStandard Chartered, who would fund based on buyer-client acceptance of the PO.

Up to 60% of PO value can be directlyremitted to supplier’s raw material provideronce pre-approved by the buyer-client.

Post-shipment of goods to the buyer-client, and request 100% funding via export invoice financing. Financing converted into post-shipment finance.

Buyer-client pays via Vendor PrePay.All outstanding pre-shipment or export invoice financing loans to the supplier can be automaticallypaid with prepayments out of Vendor Prepay - on non recourse basis to supplier.

The invoice is due for payment, Standard Chartered concludes the transaction by debiting the buyer client’s account.

Strengthen your supply chain to achieve sustainable growth

Get in touch with us From trade finance to cash management, Standard Chartered supports clients’ financial needs across Asia, Africa, and the Middle East. To learn more about how we can support your growth in these dynamic regions, please get in touch.

Contact your Standard Chartered relationship manager directly.

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