Additional Areas > Early financing to vendors

  • Financing vendors is a way of paying monies owed by the customer ahead of schedule to vendors. Prepayment for authorized invoices are transferred to a third party (the financing body), which takes the place of the vendor for collecting payment according to the originally planned schedule.
  • Our system is based on the vendor module. The use of this module places us in the workspace between customers and their vendors (pricelists, orders, entries into warehouses, vendor invoices, and notices of payments) and this allows us to be in a situation to offer early financing to all of the vendors for all of the invoices for a specific customer.
  • The body financing the activity will be in a situation that the loaning money to the vendor is based on the financial strength of the customer and will rely on the customer's obligation to pay the debt.
  • The customer's strength is important to the financing body to assure that payment is made at the end of the process, with added interest, by the vendor.
Financing Process
Advantages
The vendor's Advantages

Financing process to vendors

sourcingvision

Advantages for the customer

  • The financing body can see the compensation from the customer as a "loan" according to the customer's conditions, and as a result can extend the period of credit. The customer will have improved cash flow, will increase the circulating capital and will improve the financial ratios on the balance sheet.
  • The customer will tighten the working relations with the vendor by offering attractive financing for the transaction.
  • Creating the vendor's dependency on the customer and assisting vendors in financial difficulties.
  • In this situation, the vender may be willing to give a lower price for this customer.

The vendorיs advantages

  • Available and inexpensive financing at relatively low interest.
  • The financing is non-banking finance, so it does not increase the obligo.
  • Neutralizes high risks.
  • Financial flexibility in all the activities with this customer - postponing decisions to the best time.