Identifying the tensions in supply chain financing

Funding model needs to provide flexibility and both immediate and long-term support for businesses, says CEO

Identifying the tensions in supply chain financing


By Madison Utley

Given the impact COVID-19 has had on many Australian businesses, it’s crucial agile fintech lenders continue to offer products which are flexible and able to truly meet the evolving need, according to Leo Tyndall, founder and CEO of marketplace trade credit platform Marketlend.

As technology advances and demand for SME funding becomes more nuanced, a "one-size-fits-all" solution is no longer a viable approach, the CEO has said. 

“SMEs are not given the same funding opportunities or able to obtain the equivalent insurance protection as corporates. The supply chain financing options need to be flexible and be able to accommodate both immediate and long-term support for businesses, particularly during the COVID-19 pandemic," Tyndall explained. 

While many banks offer products such as traditional trade finance and overdrafts, less than 50% of financiers provide alternative forms of financing, such as factoring, forfaiting and receivables discounting.

“Supply chain products and services that have typically been provided by banks are not as relevant now with marketplaces providing innovative working capital solutions that fit the business models of SMEs," said Tyndall.

Rather, the CEO believes supply chain financing products need to be streamlined and automated, with an emphasis on fit-for-purpose.

This conclusion, paired with a need for more transparent pricing across the sector, led Marketlend to create UnLock.

The Buy Now Pay Later B2B offering is a payment gateway that enables SMEs to boost their purchasing power with suppliers and have extended supplier terms of up to 30, 60 or 90 days.

“This solution will free up a business’ cash flow to be redirected towards staff wages, equipment or stock,” said Tyndall.

“Business can use UnLock funds, starting from $50,000 facility immediately, rather than dipping into their accounts before sales are acquired, which is really powerful for a small business.”

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