Working Capital Finance, alternatively referred to as Supply Chain Finance, is considered to be among the largest financial asset categories globally. The outstanding value of working capital worldwide is estimated to be around $1.2 trillion.
Date published
June 14, 2023
Company
Demica
Working Capital Finance, alternatively referred to as Supply Chain Finance, is considered to be among the largest financial asset categories globally.
The outstanding value of working capital worldwide is estimated to be around $1.2 trillion. This can be further categorized into three primary groups:
Receivables Finance: This involves financing solutions that enable businesses to receive immediate funds against their outstanding receivables or invoices.
Trade Receivables Securitization: It involves converting trade receivables into tradable financial instruments, providing liquidity to businesses by selling these instruments to investors.
Payables Finance: This refers to financing options that allow businesses to extend payment terms to their suppliers while offering early payment options to the suppliers through third-party financing.
As the economy faces the challenges of rising inflation and increased interest costs, the demand for working capital finance is expected to rise significantly. Companies of all sizes are exploring various funding options to optimize costs and enhance liquidity as the cost of capital escalates.
As borrowing rates soar and rising inflation continues, corporate treasurers are re-examining all options available to unlock cash. Download Demica’s guide to working capital management to discover how you can improve your company’s liquidity and cash management.
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