HNB FINANCE, recently launched a new Supply Chain Financing scheme, designed to immediately meet the critical financial needs of businesses imposed by the stringent market demands of a pandemic-stricken economy. The powerful scheme leads the market in the exceptional amount of value it is able to deliver to businesses, as it is a revolving facility designed to optimise and sustain an uninterrupted supply chain process and cash flow for both buyers and suppliers, the company said in a media release.
The financing scheme enables manufacturers to purchase from suppliers at a higher discount as payment for material is immediately settled by HNB FINANCE. The company will step in to absorb the credit period and pay the supplier immediately. This enables suppliers to maintain and enhance their liquidity, while customers are thereafter given a generous credit period of up to 120 days with minimal interest to pay off their costs to HNB FINANCE, it said.
"As an organisation that has always strived hard to innovate to meet the demands of the rapidly evolving market. This new facility is therefore aimed at easing the working capital requirement of businesses feeling the dire implications of a pandemic-stricken market. The beginning of the pandemic forced suppliers to limit their offerings to organisations who are able to pay cash at the time of purchasing raw materials, leaving many businesses who depend on these suppliers to limit their operations. Therefore, we are confident our product offers a practical approach to neutralize these challenges as it was carefully curated to can create a win-win situation for both companies and suppliers to improve their cash flow in a sustainable, convenient and smart manner. It creates a more anchored supply chain for the buyer and strengthens supplier-buyer relationships," said HNB FINANCE CEO/Managing Director Chaminda Prabhath.
The release said that once an invoice is raised, suppliers are able to receive payment within 24 hours and are no longer subjected to lengthy payment terms that are usually imposed upon credit customers. This enables customers to recover the interest rate paid to HNB FINANCE, indirectly in the form of a discount. Since it’s a revolving facility, customers can also enjoy a longer credit period and reuse the same funds to purchase new raw material after the outstanding has been paid off. Further, customers are able to demand for higher discounts from suppliers as they are able to pay in cash at the time of purchase, which brings a direct positive impact to the bottom line, strengthens business relationships and encourages consistent, quicker material delivery from suppliers.
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