What are the main modes of supply chain finance

What are the main modes of supply chain finance

In the supply chain, the different strengths and weaknesses of the enterprises lead to the fact that they are not in a completely equal position in the transaction process, and the cash flow shortfalls of the weak SMEs have their own characteristics. So, here is the main mode of supply chain finance that I have organized for you, welcome to read and browse.

First, the procurement stage of the supply chain financing? Prepayment financing model

In the procurement stage, the supply chain financing business model based on prepayment financing is used to make ? cash disbursement? The point of time is delayed as far as possible, so as to reduce the cash flow gap; in the daily operation stage, the supply chain financing business model based on movable property pledge is adopted to make up for? Pay cash? to? Sell inventory During the sales stage, the supply chain financing business model based on accounts receivable financing is adopted to make up for the cash flow gap between? In the selling stage, a receivables-based supply chain financing business model is adopted to bridge the cash flow gap between cash payment and inventory sale. and Cash received The cash flow gap during the period of selling inventory and receiving cash.

In terms of product classification, prepayment financing can be understood as ? financing of future inventory? Because from the point of view of risk control, the security basis of prepayment financing is the prepayment under the customer's right of lading to the supplier, or the realization of the right of lading through the shipment, transportation and other aspects of the formation of in-transit inventory and inventory inventory. In the case of right of lading financing, such as secured lading (or promissory note), this means that the customer pays the advance payment to the upstream through bank financing, and the upstream issues a bill of lading upon receipt, and the customer then pledges the bill of lading to the bank. The customer then pledges the bill of lading to the bank. After that, the customer takes delivery of the goods in installments by making payments to the bank in installments. For some enterprises with very good sales conditions, the inventory of materials is often very small, so the main demand for financing arises from waiting for the upstream scheduling and goods in transit cycle. In this case, if the buyer carries the goods, the bank will generally appoint a neutral logistics company to control the logistics link and form an in-transit inventory pledge; if the seller carries the goods, it is still a pledge of the right to take delivery of the goods. After the goods arrive at the buyer, the customer can apply to the bank to renew the inventory financing in the warehouse. In this way advance financing becomes inventory financing? Bridge? The link.

Traditional working capital loans can also be earmarked for prepayment, and broadly speaking, prepayment financing includes the bank's credit support for the customer's purchasing activities, such as letters of credit can be opened. However, in both cases, the bank will generally require the credit applicant to provide real estate pledges or guarantees to cover the exposure. Obviously this is different from the concept of prepayment financing in supply chain financing. In prepayment financing in supply chain financing, the security support for the financing is precisely the trade acquisition under the financing, so the asset support requirement for the customer financing is pared down to the maximum. SMEs in the downstream of the supply chain often have a short payment period for goods obtained from large upstream enterprises, and sometimes need to make advance payments to the upstream enterprises. For SMEs with short-term capital flow difficulties, the prepaid accounts financing model can be used to finance one of their specialized prepayments, thereby obtaining short-term credit support from financial institutions.

The prepaid accounts financing model is a financing business that is conditional on the upstream core enterprise (seller) committing to repurchase, and the SME (purchaser) applying for a pledge loan from the financial institution with the established warehouse list in the financial institution's designated warehouse and the financial institution controlling the right to pick up the goods.

The basic business process is as follows:

1, small and medium-sized enterprises (downstream enterprises, purchasers) and the core business (upstream enterprises, sellers) signed a contract of purchase and sale, and negotiation of small and medium-sized enterprises to apply for a loan, specifically for the payment of the purchase price;

2, small and medium-sized enterprises with the contract of purchase and sale of financial institutions to apply for a pledge loan of warehouse receipts, specifically for the payment of goods to the core enterprise The transaction of the payment of goods;

3, the financial institutions to review the creditworthiness of the core business and the ability to repurchase, if the review passes, then sign a repurchase and quality assurance agreement with the core business;

4, the financial institutions and logistics companies to sign a warehousing supervision agreement;

5, the core business (the seller) in the receipt of financial institutions agree to the small and medium-sized enterprises (the buyer) of finance After receiving the notice from the financial institution, the core enterprise (seller) will ship the goods to the warehouse of the logistics enterprise designated by the financial institution and hand over the warehouse receipt to the financial institution;

6, the financial institution receives the warehouse receipt and disburses the payment for the goods to the core enterprise;

7, SMEs will pay the security deposit, and the financial institution will release a corresponding proportion of the right to pick up the goods to the SMEs and inform the logistics enterprise that it can release a corresponding amount of the goods to the SMEs;

8, SMEs get the right to withdraw goods, go to the warehouse to withdraw the corresponding amount of goods; continue to follow the bad, until the margin account balance is equal to the amount of the bill of exchange, the SMEs will be withdrawn until the goods. Repurchase agreements and pledge contracts related to this financing activity are canceled accordingly.

The prepaid financing model realizes leveraged purchasing by SMEs and volume sales by core large enterprises. What SMEs get through prepaid financing business is the right to pay for goods in installments and take delivery of goods in installments, and they do not have to pay the full amount of goods at one time, thus providing financing convenience for SMEs in the supply chain nodes and effectively alleviating the short-term financial pressure brought about by solving the full amount of goods purchased. In addition, for financial institutions, the prepaid accounts financing model to the supply chain upstream core large enterprise commitment to buy back as a prerequisite for the core enterprise for small and medium-sized enterprise financing to bear joint and several guarantee responsibility, and financial institutions designated warehouse for the established warehouse receipts as a pledge, which greatly reduces the financial institutions of the credit risk, but also to the financial institutions to bring the revenue, to achieve the purpose of the multi-win.

Supply chain financing in the operation stage? Chattel pledge financing model

Chattel pledge business is the bank to the borrower's own goods as a pledge, to the borrower to issue credit loan business. Due to the strong mobility of raw materials, finished products and other movable assets, as well as China's laws on the effective conditions of the pledge, financial institutions in the logistics tracking of movable assets, warehousing and supervision, pledge procedures, price monitoring and even liquidation and other aspects of the challenge, which gives financial institutions to bring great risk to the loan. Therefore, movable assets have not been favored by financial institutions, and even if SMEs have a lot of movable assets, they cannot obtain loans accordingly. Based on this, the supply chain financing model is designed as a pledge financing model for movable assets under the supply chain.

Chattel pledge financing model under supply chain refers to the financing business model in which banks and other financial institutions accept chattels as pledge and issue loans to SMEs with the guarantee of core enterprises and the supervision of logistics enterprises. Under this financing model, financial institutions will sign a guarantee contract or a pledge repurchase agreement with the core enterprise, agreeing that the core enterprise will be responsible for the repayment or repurchase of the pledged movable assets in the event that the SME violates the agreement. The core enterprise of the supply chain is often larger and stronger, so it can help the financing enterprise to solve the financing guarantee difficulties through guarantee, provision of pledge or commitment to repurchase, etc., so as to ensure its good cooperative relationship with the financing enterprise and stable supply sources or distribution channels. Logistics enterprises provide services such as custody, value assessment and supervision of the pledged goods, thus building a bridge of capital financing between banks and enterprises. The essence of the movable asset pledge financing model is that financial institutions are less willing to accept movable assets (mainly raw materials, finished products) into their willingness to accept movable asset pledge products, and as a pledge collateral or counter-guarantee for credit financing.

Specific. The operation mode is as follows:

1, small and medium-sized enterprises to apply for movable property pledge loans to the financial institutions;

2, financial institutions commissioned logistics enterprises to provide the value of movable property for small and medium-sized enterprises to assess:

3, logistics enterprises to assess the value of the financial institutions and issued a certificate of assessment;

4, the movable property status in line with the conditions of the pledge, the financial institutions approved Loan amount, signed with the SMEs movable assets pledge contract, signed with the core business repurchase agreement, and signed with the logistics enterprise warehousing supervision agreement;

5, the SMEs will be movable assets transferred to the logistics enterprise;

6, the logistics enterprise of the SMEs transferred to the movable assets acceptance, and notify the financial institution to issue the loan;

7, the financial institution to the small and medium-sized enterprise Issuance of loans.

The movable assets pledge financing mode under the supply chain is an innovative and comprehensive service that integrates logistics service, financial service, and warehousing service, which effectively combines, interacts, and manages logistics, information flow, and capital flow. In order to achieve the expansion of services, optimize resources, improve operational efficiency and enhance the overall performance of the supply chain and increase the competitiveness of the entire supply chain for the purpose of comprehensive services.

With the development of market competition and customer demand, the supply chain under the movable asset pledge financing model also appeared to develop and innovate the dynamic movable asset pledge business, that is, the approved inventory pledge business, compared with the static movable asset pledge (non-determined inventory pledge), the biggest difference is that: the bank in the dynamic movable asset pledge in addition to the borrowing enterprise's goods to approve the pledge rate, and give a certain proportion of the amount of credit, but also according to the value of the inventory approved pledge rate. It will also approve a minimum value control line according to the value of inventory, when the value of goods above the control line, the borrowing enterprise can make its own application to the third party logistics enterprise to withdraw or replace the goods: when the value of goods below the control line, the borrowing enterprise must apply to the commercial bank, the third party logistics enterprise according to the bank's instructions to carry out the operation of withdrawing or replacing the goods; and static movable property pledge business, the borrowing enterprise shall not be free to The borrowing enterprise shall not withdraw or replace the goods pledged to the commercial bank, unless it makes up for the deposit, returns the bank's credit or increases other guarantees.

movable assets pledge can also be warehouse receipts pledge mode of operation, warehouse receipts can be used as evidence of the right to pledge, warehouse receipts pledge, should be in the contract agreed period of time will be the right to pledge evidence to the pledgee, the pledge contract certificate delivery date effective. Warehouse receipts generally refers to the warehouse operator to accept the customer (owner) entrusted to the goods will be deposited into the warehouse after the inventory issued to the stockholder to explain the situation of the inventory of the inventory. Warehouse receipt pledge can generally be divided into standard warehouse receipt pledge and non-standard warehouse receipt pledge two modes:

1, the standard warehouse receipt refers to the unified development of the futures exchange, the futures exchange designated delivery warehouse to complete the acceptance of warehoused commodities, confirmation of the qualified issued to the owner of the goods and in the futures exchange registered in the effective right to withdraw the voucher, the standard warehouse receipt by the futures exchange registration, can be used to carry on the delivery, trading, transfer, credit, pledge and write-off. The standard warehouse receipts pledge refers to the commercial banks to standard warehouse receipts as a pledge, to give the conditions of the borrower (the pledgee) a certain amount of financing credit business.

2. Non-standard warehouse receipts refer to those issued by third-party logistics enterprises recognized by the commercial banks, and are expressed in the form of certificates of interest in the form of generic products with strong liquidity in the production and logistics fields. The pledge of non-standard warehouse receipts refers to the credit business in which commercial banks pledge non-standard warehouse receipts to give qualified borrowers (pledgees) fixed-amount financing. The first step in the process is to make sure that you are able to get the most out of your time and money, and that you are able to get the most out of your time and money, and that you are able to get the most out of your time and money.

Third, the sales stage of the supply chain financing? Accounts Receivable Financing Model

Accounts Receivable Financing Model refers to the business model in which the seller assigns the outstanding accounts receivable under credit sales to a financial institution, which provides financing for the seller. Accounts receivable financing based on the supply chain generally finances small and medium-sized enterprises (SMEs) upstream of the supply chain. SMEs (upstream creditor enterprises), core enterprises (downstream debtor enterprises) and financial institutions are all involved in this financing process, with the core enterprises playing the role of a counter-guarantee throughout the operation, and once the financing enterprises (SMEs) run into problems, the core enterprises will assume the responsibility of making up for the losses of the financial institutions; financial institutions still have to carry out a risk assessment of the enterprise before agreeing to provide a loan to the financing enterprise, and just put the concern The focus is on the repayment ability of the downstream enterprise, the transaction risk, and the operation of the whole supply chain, rather than just assessing the creditworthiness of the SME itself.

Generally speaking, traditional bank credit is more concerned with the asset size of the financing enterprise, all assets and liabilities, and the overall creditworthiness of the enterprise. The accounts receivable financing model is based on trade contracts between enterprises, based on the acceptance of the financing enterprise's products in the market and the profitability of the products. At this point, the bank pays more attention to the repayment ability of the downstream enterprise, the transaction risk, and the operation of the whole supply chain, rather than only focusing on the risk assessment of the SMEs themselves.

In this model, as the core of the debtor enterprises, large enterprises have better credit strength, and there is a long-term stable credit relationship with the bank, so in the process of financing for small and medium-sized enterprises plays the role of counter-guarantee, once the small and medium-sized enterprises are unable to repay the loan, but also have to bear the responsibility of repayment, thus reducing the bank's risk of lending. At the same time, under the role of this constraint mechanism, small and medium-sized enterprises in the industrial chain in order to establish a good credit image and maintain long-term trade and cooperative relations with large enterprises, will choose to repay the bank loans on schedule, avoiding the phenomenon of evasion of bank loans. The accounts receivable financing model based on supply chain finance helps SMEs overcome the drawbacks of their asset size and profitability level being difficult to meet bank lending standards, and their financial condition and creditworthiness level not reaching bank credit level, and helps SMEs obtain bank financing by utilizing the creditworthiness strength of the core large enterprises and to a certain extent reduces the lending risk of the banks.

The specific operation mode is as follows:

1, small and medium-sized enterprises (upstream enterprises, the seller) and the core enterprise (downstream enterprises, the purchaser) to carry out goods transactions;

2, the core enterprise to the small and medium-sized enterprises to issue accounts receivable documents, to become a debtor in the relationship of the transaction of goods;

3, small and medium-sized enterprises with the receivable documents to the financial institutions for the application of Pledge loan;

4, the core enterprise to the financial institution to issue the accounts receivable document certificate, as well as payment commitment;

5, the financial institution loan to the SME, the SME becomes a financing enterprise;

6, the SME financing, the use of the loan to buy raw materials and other factors of production, in order to continue to produce;

7, the core enterprise to sell the product The core enterprise pays the prepaid amount to the account specified by the financing enterprise in the financial institution:

9. The accounts receivable pledge contract is canceled.

Fourth, the combination of supply chain finance financing model -?1 + N?supply chain financing paradigm

Supply chain finance is an industrial supply chain of upstream and downstream multiple enterprises to provide comprehensive financial services, which has changed the past banks to a single enterprise subject to the credit model, but around a?1?core enterprises, from raw materials, procurement, to made intermediate and final products. Instead, it focuses on a core enterprise, from raw material procurement, to making intermediate and final products, and finally delivering the products to consumers by the sales network in the supply chain, connecting suppliers, manufacturers, distributors, retailers, and even the final customers into a whole, providing financing services for the N enterprises in the chain in an all-round manner, and realizing the continuous value-added of the whole supply chain through the division of labor and cooperation among the related enterprises. Therefore, it is called? BN? model. 1+N?supply chain financing is the deepening of self-reimbursable trade financing and structural financing in terms of financing mode and risk control. This kind of financing includes financing for individual enterprises in the supply chain, as well as financing arrangements for the segmented supply chain of the enterprise with upstream sellers or downstream buyers, and it can cover the whole? Supply, production and marketing chain to provide an overall supply chain trade finance solution, for the characteristics and needs of the production and trading process of enterprises, the three basic supply chain financing modes of prepayment financing, inventory financing and receivables financing can be combined into a more complex overall solution.

Take the financing arrangements for individual enterprises as an example:

1. Financing arrangements for core enterprises: Core enterprises have strong strengths of their own, and have higher requirements for the scale of financing, the price of funds, and the efficiency of services. This part of the product mainly includes short-term preferential interest rate loans, bill business (invoicing, discounting), enterprise overdraft line of credit and other products.

2, on the upstream suppliers of financing solutions: upstream suppliers to the core business is mostly on credit, the core business is generally on the upstream suppliers to use long term procurement. Therefore, the financing of upstream enterprises is mainly based on accounts receivable financing, which is mainly equipped with factoring, bill discounting, order financing and other products.

3. Financing solutions for downstream distributors:The settlement of core enterprises to downstream distributors generally adopts payment before delivery, partial prepayment or credit sales within a certain amount. Distributors to expand sales, beyond the amount of the purchase part of the cash (including bills) to be used to pay. Financing programs for downstream dealers are mainly based on prepayment financing in the pledge credit of movable assets and cargo rights. Equipped with products mainly including short-term working capital loans, billing, bonding, domestic letters of credit, letters of guarantee and so on.

?1+N? supply chain financing model significantly improves the trade finance risk situation. Establishing a direct credit relationship or close cooperation with core enterprises is conducive to eliminating the risks caused by information asymmetry in core enterprises, achieving a high degree of unity of logistics, capital flow and information flow in the process of business operations, and solving the problems of risk judgment and risk control in financing credit to supporting small and medium-sized enterprises.

;