GT Nexus and trade finance solutions provider SeaburyTFX announced today a new funding program that leverages big data on the GT Nexus platform to deliver suppliers access to low cost capital.
The program opens the flow of capital into the supply chain to reduce costs and risk by basing funding decisions on the trading partners’ performance history, instead of the buyer’s or supplier’s credit.
“The announcement was made at Bridges 2015, the premier cloud supply chain industry event, which was held June 8-11 in Florida,” a GT Nexus press release informed.
GT Nexus provides a legal framework and compliance engine for B2B commerce that helps ensure clean and compliant transactions on more than $100 billion in global business annually.
“The high performance rate of the overall GT Nexus network of transactions makes it an attractive portfolio for securitisation in the financial markets,” said Robert Lin, president of SeaburyTFX.
“Unlike traditional programmes working with individual banks or providers on a transactional basis, funding of this program is secured by a pool of transactions on the platform,” Lin added.
“The transparency, standardisation, comprehensiveness and reliability of GT Nexus’ big data are critical to ensuring liquidity, and thus enabling healthier and more efficient supply chain finance,” he observed.
Buyers and suppliers in this program are able to remove from the supply chain capital-related barriers that can cause delays or impact customer service.
“This type of program reduces both cost and risk in our supply chain while improving overall performance,” said Harry Gaffney, CFO of Charles Komar & Sons.
“Our suppliers can access funding to run their business when they need it most, at key times within the transaction lifecycle, even as early as the order stage,” Gaffney too added.
“Access to liquidity at crucial points assures the flow of supply goes un-disrupted and improves our customer performance,” he noted.
Funding is provided off-balance sheet, so suppliers can obtain cash at the same rate and terms for any qualified buyer on the GT Nexus platform.
“We can now get the funding we need earlier in the transaction lifecycle and we no longer have to wait for an approved invoice,” said Adam Sutton, president of Highland Belts & Fine Leather.
“Cash flow visibility and payment certainty allow to map out growth and we can move forward with certainty, knowing that we will have the funds to buy materials and fill new orders,” he too noted.
According to GT nexus, traditional supply chain finance programs look at a company’s profitability, cost of goods, sales figures and growth projections for the region.
“Collecting and interpreting data can take weeks, given lack of standards in both documentation and pricing methodologies,” it explained.