Although our primary product involves paying Suppliers on behalf of our clients (the Buyer), once our clients obtain the inventory, they then become the Seller/Supplier of those goods. On those occasions where our clients are selling to much larger buyers, the demand for additional supply can frequently outpace the financial ability of our client to deliver. Losing incremental sales is never a good thing and we have several means to help our clients to avoid this. One such opportunity is a rapidly growing product known as Reverse Factoring. This Supply Chain Financing product, unlike traditional factoring where a supplier looks to finance its receivables, is designed to place the focus on the Buyer whose higher creditworthiness permits its receivables to be financed at a better interest rate and within higher facility limits than would be available to the smaller Supplier.
Reverse Factoring promotes higher sales for the smaller Supplier (our client) with quicker payment on Buyer invoices and extended repayment terms for the Buyer as established with Bramid. The outcome is improved cash flow for both Supplier and Buyer and access to a higher sales relationship that would have been difficult to achieve.
Mitigating risk is the name of the game in any business. Over the past several years, more risk has been introduced into supply chain at the expense of suppliers, while to the benefit of some buyers. There has been a growing trend of large buyers taking much longer to pay their suppliers, and in some cases, threatening their suppliers with these newly extended terms with a “take it or leave it” ultimatum. The pressure is building on some suppliers to meet buyer demand for extended credit terms. By establishing a partnership with Bramid Limited, a supplier can continue to service its buyers at a higher purchasing level without the added credit risk. Bramid can extend the payment terms with an additional 30 to 90 days of financing to a buyer, relieving the stress of the typical cash-to-cash cycle for the buyer, and incrementally increasing purchases from the supplier.
Just like any financial entity, Bramid Limited is obliged to perform an appropriate level of due diligence before engaging in a trading agreement with a client. This would mean pre-clearing prospective clients with the supplier, followed by visiting with prospective clients to begin the application process and provide more information about ourselves and our product. After working in close cooperation with the supplier and upon final approval, Bramid would be in a position to offer a trading agreement to a prospective client or even a list of clients. Experience has shown that our entire process has a turnaround time typically shorter than traditional lenders. If a prospective client wishes to proceed, we simply require a signature on our documentation to establish the facility and the formal request for payments to be made to our designated supplier partner. Contact us today to learn more about becoming a Supplier Partner.