A product set to revolutionise the working capital market, Supply Chain Accelerate (SCA) links the various parties in a business transaction – buyer, seller, and financier – in order to lower financing costs and improve business efficiency.
SCA allows for an extension of existing supplier credit terms that optimises working capital for both the buyer and the seller. The innovative product provides a fast and flexible working capital solution unlike anything currently available to medium-large Australian businesses, providing 100% of their seller invoices upfront. Meanwhile, the buyer can pay 90 days later, with the cost worn by either party or split as a percentage.
Head of Strategic Acquisitions for Octet Supply Chain Accelerate, Dennis Trautmann said, “Traditional financiers leave businesses little or no scope to free up more cash by imposing tight, cumbersome covenants upon them. Octet SCA enables you the opportunity to increase working capital by extending credit terms from existing domestic and international suppliers.”
SCA boasts a range of advantages over other funding options for both parties to a transaction:
• Increase cash flow
• Extend days payable outstanding (DPO) by lengthening your actual payment terms to 90 days
• Off-balance sheet funding. Octet SCA is not classified as debt, therefore enhancing
your balance sheet metrics and complying with existing bank covenants
• Mitigate supply chain disruptions by allowing the seller to access inexpensive
financing on the back of the buyer’s credit rating
• Reduce Days Sales Outstanding (DSO) by getting paid early
• No assignment of debt, unlike other Supply Chain offerings in the market where the financier
is taking an assignment of debt over all of the seller’s assets
• Better working capital ratios and reduced liquidity risks
• Non-Recourse – SCA reduces credit exposure by allowing you to get paid early
• Improved balance sheet position (lower receivables balance)
• Not treated as debt
Dennis added, “SCA really suits most industries, from healthcare to pharmaceuticals, retailing and manufacturing – providing a world class funding solution that makes transactions fast, simple and safe”.
For further details on Supply Chain Accelerate solution please contact your Octet supply chain specialist.