Supply Chain Finance Platforms Might Provide “Win-Win”

Supply chain finance enables companies, such as manufacturers, to lengthen their payment terms, while simultaneously enabling suppliers to get paid early. Here’s a look.

A not-so-new but still largely unexplored model of financing aims to lessen the tension between suppliers and manufacturers, creating greater flexibility on delivery and payment dates and infusing both sides with money instead of debt.

It’s called supply chain finance, and it allows a seller (typically a supplier) to sell its invoices at a discount to a financial institution as soon as the invoices are approved by the buyer (usually a manufacturer or retailer).

Supply chain finance platforms let a buyer pay later and not tie up its cash, while a supplier can receive its money as soon as its obligations are met — rather than waiting for a buyer to pay months later. Instead of hinging the transaction on the creditworthiness of the supplier, the financial institution (a bank or hedge fund) deals with the typically more fiscally sound buyer.

Aside from showing the promise of updating the traditional (and sometimes parochial) way of bankrolling the delivery of goods — with the supplier desperate for cash as it waits for the manufacturer to pay — supply chain finance could also strengthen relationships between manufacturers and their suppliers and improve how products are made.

“For any company, cash is oxygen, and if you run out of cash, you run out of oxygen,” said Bill McBeath, chief research officer at ChainLink Research. “A reason why a manufacturer would be interested in this is, besides it being a better use of cash, it can also help a supply chain become healthier.”

The need for supply chain finance

Supply chain finance upends the traditional means of bankrolling a supply chain in that it lets manufacturers and suppliers work together to pursue payment and delivery terms that consider both sides’ unique roles.

For one, globalization has changed how products are manufactured. Parts arrive from suppliers spread across many countries, and a manufacturer’s finished product often targets a global customer base. But manufacturers also typically need time to create a larger product and ship it — more time than when a supplier expects payment. When a manufacturer pays a supplier faster than it can turn a profit on its own product, it is incurring debt and tying up cash flow.

As an example of this imbalance, Tom Roberts, a senior vice president of the supply chain finance platform PrimeRevenue, points to how a heavy equipment manufacturer sometimes can’t turn around a product faster than the industry standard of 80 days payable outstanding. Meanwhile, a supplier will send a bill as soon as its product is received and expect payment within 30 days, meaning the manufacturer will, until it makes money on its product, provide the supplier with a loan for 50 days or more, he said. “It’s not the best way to convert cash,” Roberts added.

On the other end, suppliers typically don’t want to accept longer payment terms to accommodate a manufacturer’s longer production and sales schedule. Suppliers that agree to lengthy payment schedules will similarly feel the strain of cash and might resort to high-interest loans.

Supply chain finance aims to pay suppliers when they need to be paid, while taking manufacturers off the hook — albeit temporarily — from paying before they’re ready. There are various forms of supply chain finance, but the one favored in manufacturing focuses on post-invoice transactions. Using a supply chain finance platform, a manufacturer and supplier come to terms and select a lender. After a manufacturer approves and submits the supplier’s invoice to the lender, the lender pays the supplier on an agreed date or earlier, minus a small discount for the manufacturer. The manufacturer, meanwhile, has a longer window of time to pay the lender.

Roberts and others call the arrangement a “win-win” for both sides. A supplier can get paid within days, while a manufacturer can wait as long as 120 days — sometimes longer — before having to meet its financial obligation.

Fintech platforms aim to simplify financing particulars

Banks and even pension funds are acting as lenders and accelerating interest in supply chain finance, said Ganaka Herath, a partner at the consulting firm McKinsey & Company. With a relatively short financing period and with manufacturers serving as safer credit risks — instead of suppliers that probably have less financial resources — investors are slowly starting to see potential in supply chain finance, he said.

Supply chain finance started as a Citibank product in the 1990s and has “trudged along” with a “few big players” — including Walmart and Mercedes-Benz — now taking advantage of the ability to ensure suppliers are paid promptly, while they can keep debt off their books, Herath said. Still, a 2015 McKinsey report showed that only about one-tenth of a potential $20 billion global market for supply chain finance has been captured, and that lack of penetration holds true in 2017, Herath said.

PrimeRevenue is one of several fintech companies that offer cloud-based supply chain finance platforms and act as brokers, connecting manufacturers and suppliers with financial institutions. McBeath of ChainLink Research said the industry publication Trade Financing Matters (TFM) succinctly breaks down the offerings of supply chain finance platforms.

For example, TFM recommends Taulia for robust invoice automation and dynamic discounting. Ariba focuses on e-procurement, with e-invoicing and discounting capabilities, while Nipendo and Tradeshift are pioneering the platform-as-a-service model, combining cloud-based software for data and document management with apps. PrimeRevenue and Orbian are ones to consider for approved trade payable finance programs and wide selections of third-party funding providers. Manufacturers and suppliers can also consider offerings by traditional financial service firms, such as BNP Paribas, Citigroup, Deutsche Bank and HSBC.

Manufacturers can also contemplate using their own homegrown platform by connecting their accounting and invoicing technologies and working with financial institutions, Herath said, but that will probably be complicated.

Supply chain finance might not be a “win-win” for everyone, as Roberts and others suggest. Harvard Business Review notes that multibank fintech platforms, like PrimeRevenue, have increased the competition in financing to a point where lenders are seeing reduced profits. (Fintech platforms receive a small fee for administrating supply chain finance transactions.)

Preparing for supply chain finance platforms

A manufacturer shouldn’t try supply chain finance without first having a financial goal in mind, Roberts recommends. Whether it’s freeing up money for cash flow or funding an initiative, that goal must be clear and agreed upon by the CFO, chief procurement officer and all executives, he said. Manufacturers should also compare internal benchmarks against those of peers and competitors that use supply chain finance.

If a fear of complicated technology is holding back manufacturers and suppliers from supply chain finance, most platforms are simple to grasp and will show benefits if all parties are on the same page, Herath said. Once a manufacturer has chosen a platform, it should first focus on bringing in only the top 20% of its suppliers to keep things simple, he recommends. Then, carefully explain the concept of supply chain finance with each supplier, including a close review of negotiated terms and the overarching legal framework.

A large supplier is not going to use supply chain finance just for a 10-day payable.

The onboarding of suppliers is usually overlooked, and only months later do manufacturers realize that few of their suppliers are interested in using supply chain finance because they don’t recognize its benefits, Herath said. He advises detailing the benefits of the financing process for suppliers but not forcing them to join. If suppliers are open to the concept, they will see that it goes deeper than finance. They’ll recognize it also aligns both parties so they can jointly improve the supply chain, he said.

“A large supplier is not going to use supply chain finance just for a 10-day payable,” Herath said. “They’re going for larger intangibles: a stable supply chain where they don’t run short of working capital. They understand better the flow of how supplies move forward, so that’s why the strategic intangible of supply chain finance is even more important than the financial benefit.”

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Stephanie Wargo

VP, Global Head of Marketing

Stephanie joined PrimeRevenue in 2015 and oversees the company’s global marketing team and strategy. With a data-driven approach, Stephanie focuses on demand generation and thought leadership to drive brand awareness, strengthen client/partner relationships, and generate new sales opportunities. Stephanie has guided PrimeRevenue through new technology releases and an evolving FinTech landscape. In addition to leading PrimeRevenue’s internal and external communications, she implemented innovative demand generation and marketing strategies to enhance the company’s overall sales pipeline.

Stephanie has extensive experience in marketing and customer success. She previously served as Vice President of Marketing and Communications at BitPay and Vice President of Client Relations and Marketing at FirstView Financial. Stephanie earned a B.A. degree in Political Science from Agnes Scott College in Decatur, Georgia.

Brian Medley

VP, Global Head of Sales

Brian joined PrimeRevenue in early 2012, after more than 20 years of sales leadership, executive-level consultant and business growth experience. As VP, Global Head of Sales, Brian leads a growing team of fintech sales professionals with a focus on developing strong customer relationships, improving sales predictability and helping PrimeRevenue enter the lucrative mid-market.

Prior to PrimeRevenue, Brian honed his enterprise software sales leadership skills at Clarus Corporation. He also served as an operations and IT management consultant for Kurt Salmon Associates. In addition to his sales and consulting background, Brian has deep experience in the financial industry having founded a successful residential mortgage broker and lending business. He is a graduate of the Georgia Institute of Technology having earned a B.S. in Industrial Engineering and Economics and M.B.A. in Global Business.

Jason Green

SVP, Global Customer Success

Jason joined PrimeRevenue in 2021 following more than two decades in the fintech/financial services industry. He brings a strong background is sales leadership due to his impressive relationship building capability as well as a successful track record in creating structure and process improvements. In his role, Jason uses his keen attention to detail to strengthen the customer experience and enhance the company’s solutions to deliver more value to clients.

Prior to joining the company, Jason held several senior level and executive roles with a focus on building and scaling sales and support organizations at both large and small companies. Jason graduated from Murray State University with a B.S in Marketing.

Matt Ford

SVP, Global Product Innovation

Matt joined PrimeRevenue in early 2015 and is responsible for overseeing all commercial, strategic and operational aspects of PrimeRevenue’s supply chain finance offerings throughout EMEA, based in Prague. He has been instrumental in gaining global alignment and developing supplier enablement processes for the region.

Matt joined PrimeRevenue following a 15-year career at Morgan Stanley, where he worked in fixed income operations covering debt syndication through bonds, EMTNS, corporate loans and other debt securitization. Notably, he set up non-core location operations in Europe (Budapest) and all lending operations in Baltimore from scratch.

Matt, who was born and raised in South East England, earned a B.S. in Sports Science at University of Teesside where he mastered the art of TEAM development and accountability as a youth international rugby player.

Dominic Capolongo

EVP, Global Head of Funding

Dominic joined PrimeRevenue in 2016, and is responsible for leading our bank and capital markets funding strategies and execution. He focuses on building global, scalable and highly efficient funding structures that maximize options for supporting PrimeRevenue’s programs. Dominic began his career as an attorney and was a partner with Kaye Scholer before joining DLJ as a senior banker. Dominic brings tremendous strategic and capital markets experience in all areas of finance having held senior positions at, among others, Credit Suisse and RBC Capital Markets in addition to DLJ. Dominic earned a JD from Fordham University School of Law and a BA from SUNY Binghamton.

Gavin Cicchinelli

Chief Operating Officer

Gavin joined PrimeRevenue as Chief Operating Officer in 2021. With more than two decades of leadership and executive experience along with a deep understanding of the payments space, Gavin provides a unique focus on improving and strengthening operational strategies and implementing GTM growth execution. He is responsible for leading transformation across corporate and operational strategies as well as building a repeatable and scalable commercial growth strategy that aligns with PrimeRevenue’s core business while delivering key adjacent growth opportunities.

Prior to joining PrimeRevenue, Gavin served as President and Chief Revenue Officer of Integrated Solutions at TSYS, a global payment processing services company acquired by Global Payments (NYSE:GPN). There, he also served as Head of Product and divisional COO. Throughout his career, Gavin has held multiple leadership positions including VP of Sales, SVP of Business Development, and President of Financial Institutions. Gavin graduated from the University of Northern Colorado, Greeley.

David Quillian

Chief Legal Officer

David joined PrimeRevenue as General Counsel in 2007. He and his team have been instrumental in successfully creating the unique legal structures that support PrimeRevenue’s multi-funder model and global funding capabilities. David is also the lead named inventor on PrimeRevenue’s two patents for Electronic Time Drafts, which allow PrimeRevenue to manage supply chain finance programs using electronic negotiable instruments as opposed to accounts receivable. Prior to PrimeRevenue, David was General Counsel at Harbor Payments, which was acquired by American Express (AXP) in 2006, and Magnet Communications, which was acquired by Digital Insight (DGIN) in 2003. He holds degrees in Economics and History from Duke University, and Juris Doctor and M.B.A. degrees from the University of Georgia.

Nathan Feather


Nathan has successfully ushered PrimeRevenue from our very early days as a visionary startup, through the financial crisis to today’s position as a thriving mid-sized leader in the cloud-enabled supply chain finance marketplace since joining PrimeRevenue in January 2006. He was instrumental in recapitalizing the company with an $80M investment led by BBH Capital Partners in 2015. Prior to PrimeRevenue, he held various financial management roles with Ariba, Freemarkets and PriceWaterhouseCoopers. Nathan holds a BS in Accounting from Pennsylvania State University.

PJ Bain


PJ has an impressive and accomplished track record as an enterprise software entrepreneur and executive. PJ has built a solid record of success with PrimeRevenue since being appointed Chief Executive Officer in July of 2009. The company has received numerous awards for growth, customer service, innovation, along with being recognized as a top employer.

PJ is a life-long software and technology entrepreneur having been involved in numerous firms in the roles of founder, executive, advisor and investor. Immediately prior to PrimeRevenue, PJ was the VP and General Manager of Exact Holding N.V. (NYSE/AMS: EXACT), a leading global provider of business software solutions. He was previously Founder and CEO of Inspired Solutions, an Atlanta-based, B2B software and services firm that grew to be the largest reseller of Exact Software in North America, later acquired by Exact. PJ holds a Bachelor of Industrial Engineering from Georgia Institute of Technology.