What are the financing modes of supply chain finance?

There are three financing modes of supply chain finance, namely accounts receivable financing, inventory financing and prepayment financing.

Accounts receivable financing mode mainly refers to that upstream enterprises sign real contracts with downstream enterprises based on accounts receivable in order to obtain funds, and then apply for financing from supply chain enterprises with accounts receivable as repayment source.

Inventory financing: Inventory financing mainly refers to the trade process of commodity mortgage and pledge financing. Generally, when the enterprise has a large inventory or a slow inventory turnover, which leads to a great pressure on capital turnover, the enterprise will use the existing commodities to cash out the funds in advance.

Advance payment financing: Based on inventory financing, advance payment financing has been developed. On the premise that the buyer pays a certain deposit, the supply chain enterprise negotiates the full payment with the seller. After the seller delivers the goods according to the sales contract, the goods arrive at the designated warehouse, and the pledge is set as the guarantee of the advance payment.

What does supply chain financing mean?

Supply chain financing is a financing mode that takes the core enterprises in the supply chain and related upstream and downstream supporting enterprises as a whole, and formulates an overall financial solution based on cargo rights and cash flow control according to the transaction relationship and industry characteristics of enterprises in the supply chain.