What are the supply chain finance transaction models

What are the supply chain finance transaction models

The cash flow gap of SMEs often occurs in the three phases of procurement, operation and sales. Here is what I share with you about what are the supply chain finance transaction models, welcome to read and browse.

First Purchasing stage of supply chain financing? Prepayment financing model

In the procurement stage, a supply chain finance business model based on prepayment financing is used to make ? The cash payment is made at a later point in time. The point of time of cash payment 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 the cash payment? 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.

Yuntu supply chain finance pointed out that the traditional working capital loans can also be designated for the purpose of prepayment, and broadly speaking, prepayment financing includes the bank's credit support for the customer's purchasing activities, such as the letter of credit to be opened. In both cases, however, the bank will generally require the credit applicant to provide a real estate pledge or guarantee 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 prepayment 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 in which the SMEs (purchasers) apply for a pledge loan to the financial institution on the premise that the upstream core enterprise (the seller) commits to repurchase, and the financial institution controls the right to take delivery of the goods under the condition that the SMEs (purchasers) apply for a pledge loan to the financial institution with the established warehouse receipts from the financial institution's designated warehouses.

Its basic business process is as follows:

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

2, small and medium-sized enterprises with the purchase and sale contract to the financial institution to apply for warehouse receipts Pledge loan, specifically for the payment of the transaction to the core business;

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 and supervision agreement;

5, the core business (the seller) in the receipt of financial institutions Agree to small and medium-sized enterprises (purchaser) financing notice, to the financial institutions designated logistics enterprise warehouse shipments, and will obtain warehouse receipts to the financial institutions;

6, the financial institutions received warehouse receipts to the core business to disburse the payment;

7, small and medium-sized enterprises to pay deposits, the financial institutions to release a corresponding proportion of the right to pick up the goods to the small and medium-sized enterprises, and to inform the logistics enterprise can release a corresponding amount of goods to the small and medium-sized enterprises;

8. The SMEs obtain the right to take delivery of the goods and go to the warehouses to take delivery of the corresponding amount of goods; and the process continues until the balance of the margin account equals to the amount of the draft, and the SMEs take delivery of 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 assume joint and several guarantee responsibility, and financial institutions designated warehouse for the pledge of the established warehouse receipts, which greatly reduces the financial institutions of the credit risk, but also to the financial institutions to bring revenue, to achieve the purpose of a win-win situation.

Second Operational stage of the supply chain financing? Chattel pledge financing mode

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.

Yuntu Supply Chain Finance points out that the movable property pledge financing mode under the supply chain refers to the financing mode in which banks and other financial institutions accept movable property as pledge and issue loans to SMEs with the help of guarantees from the core enterprises and supervision from the 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 when 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 pledge, thus building a bridge for capital financing between banks and enterprises. The essence of the movable property pledge financing model is that the financial institutions are less willing to accept the movable property (mainly raw materials, finished products) into its willingness to accept the movable property pledge products, and as a pledge collateral or counter-guarantee for credit financing.

The specific operation mode is as follows:

1, SMEs apply for chattel pledge loans to the financial institutions;

2, the financial institutions entrusted the logistics enterprises to the chattel provided by the SMEs to assess the value of:

3, the logistics enterprises to assess the value of the assessment, and to the financial institutions to issue assessment certificates.

4, the movable property status meets the pledge conditions, the financial institution approved the loan amount, and small and medium-sized enterprises to sign a movable property pledge contract, signed a repurchase agreement with the core business, and signed a warehousing supervision agreement with the logistics enterprise;

5, small and medium-sized enterprises will be transferred to the logistics enterprise of the movable property;

6, the logistics enterprise of small and medium-sized enterprises transferred to the movable property for acceptance, and notify the financial institutions to issue loans;

7. Financial institutions issue loans to SMEs.

The movable property pledge financing mode under the supply chain is an innovative 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.

The 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 for their assessment, and are expressed in the form of 'equity certificates' for generic products with strong liquidity in the production and logistics fields. Non-standard warehouse receipts pledge refers to the credit business in which commercial banks pledge non-standard warehouse receipts to give qualified borrowers (pledgees) a certain amount of financing. From the field of cooperation between Chinese commercial banks and third-party logistics enterprises in logistics finance, the non-standard warehouse receipt pledge business is more representative.

The third 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, and the financial institution 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 utilizes the credit strength of core large enterprises to help SMEs obtain bank financing, and to a certain extent reduces bank lending risks.

The specific operation mode is as follows:

1, SMEs (upstream enterprises, the seller) and core enterprises (downstream enterprises, the purchaser) to carry out transactions in goods;

2, the core enterprises to the SMEs to issue accounts receivable documents, to become a debtor in the relationship of the goods transaction;

3, The SME applies to the financial institution for a pledge loan with the accounts receivable document;

4. The core enterprise issues a certificate of the accounts receivable document to the financial institution, as well as a commitment to pay;

5. The financial institution lends money to the SME, and the SME becomes a financing enterprise;

6. The SME finances the SME, and then uses the loan to purchase raw materials and other factors of production, in order to continue production ;

7, the core enterprise sells the products and receives the payment;

8, 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.

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