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Fabian TanParticipant
Supply chain financing (SCF) is a great way for small and medium-sized businesses to bridge the gap between suppliers and manufacturers. With the help of technology-enabled SCF providers, transactions can be automated, and tracking payments and invoices becomes a seamless experience. SCF offers a short-term loan that optimizes working capital, providing liquidity to both parties. It allows buyers to have more time to pay their invoices, while suppliers can have quicker access to the funds they are owed.
SCF is important for MSMEs as it gives them instant access to working cash, which can help them meet urgent working capital demands and make early payments. This boosts liquidity and fosters greater communication between buyers and suppliers, leading to cost-effectiveness. Lending institutions provide cash based on the buyer’s creditworthiness, supply chain relationship, and buyer-seller vintage relationship. SCF can expedite cash flows for MSMEs, and sellers can be better positioned to contribute to the growth of the buyer’s firm. Overall, SCF is a valuable tool for businesses looking to optimize their working capital and grow their enterprises.
February 10, 2023 at 10:08 am in reply to: Can small and medium-sized enterprises (SMEs) in the IT sector have better access to trade financing via the use of blockchain technology? #1223Fabian TanParticipantYes, as far as I know, over 90% of small and medium-sized firms (SMEs) rely on banks financing, which may cause financial problems during financial crises. Flash loans, DeFi tokens, peer-to-peer borrowing and lending, low-cost financing through B2B (business-to-business), crowdfunding, tech stock delisting, or other public financing schemes like Initial Coin Offerings are facilitated, accelerated, and improved by blockchain technology (ICOs). ICOs are a new sort of crowdsourcing tool that finances ventures by offering access privileges to the things to be created, and blockchain technology might allow low-cost loans. Blockchain technology increases transparency, formality, and traceability, decreases informal transactions, social transfers, and welfare transfers, formalizes economic activity, lowers transaction costs and risks, makes transactions safer and more secure, and increases sustainability.
Too many financial transfers to digital wallets, tougher identification verification, limit limitations on the largest amount users may store, and complicated and nontransparent money markets are drawbacks. MSMEs may improve support, access new possibilities, and overcome hurdles.
January 22, 2023 at 11:50 am in reply to: What are the most important elements to consider when comparing ecommerce finance alternatives? #1202Fabian TanParticipantThe system should make it simple to obtain funding. Determine how convenient the procedure is.
1.Do they require excessive amounts of paperwork?
2.Do you need to undergo extensive background checks?
3.Do they evaluate you just on the basis of your company’s performance?Their documents should also indicate whether or not they care about your success. For example, repayment and fee schedules must be specified in detail. You should avoid systems with terms that comprise extremely sophisticated language, price, and cost algorithms.
Finally, analyze the success rate of the funding platform. Check the number of firms that have been sponsored on this platform and their growth rates. Some prosperous enterprises eventually “leave” the market or are bought by larger entities.
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