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• 31 May

  Financing To Overcome Supply Chain Problems

  

  Resourcing supplies to overcome supply chain problems is something that many UK businesses have had to face. This can create the need for new financing to overcome cash flow problems if a purchaser loses its credit accounts with established overseas suppliers.

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  Global Supply Chain Problems

  Recently, just about everyone in the UK has been affected by global supply chain problems. Choices in supermarkets have been curtailed and in some instances, purchasing limits have been introduced. In some sectors materials, e.g., building supplies, have been subject to delays and prices have spiralled in response to these shortages.

  Rethinking Your Supply Chain

  This has led some companies to rethink their supply chains. Instead of importing goods or raw materials from abroad, some are looking closer to home - even within the UK for new suppliers.

  Losing Supplier Credit

  This change in resourcing can solve the supply problems but it can also create other cash flow issues. For example, importers may have credit accounts in place with existing suppliers but not with their new suppliers. Similarly, trade finance arrangements in respect of imports to the UK may not be available for purchases from UK suppliers.

  Financing To Overcome Supply Chain Problems

  Fortunately, there are some supplier finance solutions at hand.

  Purchase Finance For UK Supplies

  Firstly, some trade finance facilities can be offered in respect of both imported goods and purchases within the UK. You can use this purchase finance for UK supplies instead of using overseas suppliers. There are also stock finance facilities that enable you to pay for stock without needing to have orders for that stock.

  Replacing Trade Credit Accounts

  These types of financing can take the place of having a trade credit account with your suppliers. You will still enjoy the same (or even more) of a credit period. However, it is a trade finance company that provides the credit instead of your supplier. Also, if you are paying for supplies on a cash basis (using a UK purchases trade finance facility) you could see if you are eligible for a discount from your supplier.

  Therefore, if you have had to rethink your supply chain to combat delays, there is financing available to help you make that transition without affecting your cash flow.

  By Glenn Blackman