Supply chain finance is a category of financing arrangements where a third party (bank, fintech) advances funds against supplier invoices ahead of the buyer's standard payment terms. It improves supplier cash flow without requiring the buyer to accelerate payment.
How it works
The buyer approves the invoice, and the supplier can then draw funds from the SCF provider at a discount to the invoice face value. The buyer eventually pays the SCF provider on standard terms. The supplier gets earlier cash; the buyer preserves its DPO.
The ecosystem view
SCF works best when integrated with structured contract data and reliable invoice matching - so the underlying invoices are trustworthy and the buyer's approval is fast. This makes SCF a natural complement to Contract Performance Management.
