Treasury & Risk: COVID-19 Impacts on Trade

Several months into the global pandemic, the full economic toll of Covid-19 is becoming more apparent. In the first three months of 2020, the United States experienced its largest quarterly contraction since 2008. In Europe, the slump is being called the worst since World War II.

There a few bright spots buried amidst the gloom. Some industries, such as packaged food and grocery retail, are experiencing significant surges in demand, and the stock market has made a surprising bounce back from its plunge in the second half of March. Following a low on March 23, the Dow Jones Industrial Average rose nearly 30 percent in the next month, fostering hope that we may experience a U-shaped recovery.

In the trenches, however, such bird’s-eye observations take a backseat to companies’ dire need for liquidity. The economic stimulus packages being brought to market by central banks underscore the demand for immediate access to more cash. The U.K. government has delivered around $400 billion in various financial relief measuressurpassing the stimulus deployed during the 2008 recession. And although the U.S. Congress has already passed four relief packages, debate on a fifth package is under way.

No industry has been unscathed by the global crisis, but each sector faces unique challenges. Some businesses need to increase cash stores to stay afloat until the crisis eases, so accessing new sources of liquidity is their singular focus. For other organizations, the challenge is keeping up with a significant and unexpected uptick in business. Either situation threatens to strain the corporate cash position.

What Invoicing Suggests About Current Liquidity Levels

The PrimeRevenue payment platform processes more than $250 billion in invoices annually, across a wide range of industries and in regions around the world. The platform gives suppliers the option to accelerate payment on those invoices. Thus, at an aggregated level, PrimeRevenue can monitor trends in both invoice value and payment speed. We use the combination of these factors to calculate a metric that we call “supplier payment acceleration activity.” When supplier payment acceleration activity is rising, that means suppliers are taking early payment faster and/or on invoices worth more in aggregate—which generally signals a higher demand for immediate liquidity.

PrimeRevenue is currently seeing a notable increase in payment acceleration activity among suppliers around the world across a select group of both essential and nonessential business sectors:

Food retail.  Market-data provider Kantar reports that U.K. grocery sales jumped 9 percent in the early weeks of the Covid-19 pandemic. Tesco, a European food retailer, had to hire an additional 45,000 workers. Meanwhile, food sales grew nearly 4 percent globally year-over-year compared with 2019, according to Statista. Food retailers in the United States and abroad are concerned that distressed suppliers will have a negative impact on their business. An obvious example is the number of U.S. meat processing plants that have shut down due to coronavirus outbreaks within their facilities—leading to the possibility of meat shortages.

This essential industry is experiencing an uptick in demand, as consumers stock up on food supplies and cook more at home. In April, the value of invoices on the PrimeRevenue platform among businesses in this sector was up 5 percent year-over-year. Along with the increase in purchase volume came even larger growth in demand for early payment. Supplier payment acceleration activity rose by 20 percent in April 2020 vs. April 2019, demonstrating an immediate need for liquidity among food retail suppliers, as they respond to increased demand and market disruption.

Consumer discretionary.  This industry provides consumers with goods and services that are nonessential. A wide range of sectors fall under this broad umbrella, including automotive manufacturing, automotive retail, and home improvement retail. Due to the discretionary nature of these purchases, trade activity among companies in this industry tends to be volatile, and it is highly impacted by global events and the financial climate.

The automotive sector came to a halt early in the pandemic, because of both factory shutdowns and a deep decline in consumer demand. The financial repercussions were immediate. In the second half of April, car sales plunged 45 percent even as automakers offered lofty incentives on new vehicles. In April, representatives of this sector on the PrimeRevenue platform experienced significant decreases in total invoice value—down 87 percent among automotive manufacturers and 83 percent for automotive retail businesses. Moody’s placed seven European automotive manufacturers and 14 automotive suppliers on review for downgrade. They did the same for 25 U.S. auto and commercial vehicle part suppliers.

On a positive note, many businesses in the auto sector are starting to come back online. Kia, Volkswagen, Mercedes, Fiat Chrysler, Ford, GM, Tesla, Toyota, Hyundai, BMW, Volvo, and Subaru all began reopening factories in the first half of May. The expected return to production might be fueling the increases we’re seeing in liquidity needs within the sector. In April, supplier early payment activity among automotive retail businesses increased 274 percent compared with 2019. During that same month, automotive manufacturing suppliers increased their payment acceleration activity by 17 percent year-over-year.

Oil and energy.  Our data suggests that the oil and energy sector is currently behaving like a nonessential industry. Quarantine and self-isolation are driving a decline in demand as people stop traveling and use their cars less. This is reflected in April’s 71 percent year-over-year tumble in the overall value of invoices on our platform for the oil and energy sectors. Oil and energy suppliers’ appetite for immediate liquidity is understandably strong as they experience historic slides in prices and enter survival mode; supplier payment acceleration activity was up 19 percent in April compared with last year.

Industrials.  Like oil and energy, sectors such as aerospace and defense, industrial machinery, construction, and electrical engineering are acting nonessential. These industrial companies are seeing a sharp decline in demand, which has forced many to furlough staff. Another challenge is that companies have had to slow or cease production in factory environments as a result of Covid-19–related health regulations in jurisdictions around the world. April invoice value on the PrimeRevenue platform was down 64 percent year-over-year for industrial companies, while supplier payment acceleration activity increased 11 percent.

All Eyes on China

Our data indicates that the Chinese economy is coming back online and trade activity is starting to normalize. After a period of sharp decline that started in February, trade activity between suppliers and their customers (corporate buyers) began to increase in early March across 20 territories in China. In one weeklong period, as several Chinese factories reopened, trade activity actually outpaced 2019 by 30 percent.

Despite such bursts in business activity, volatility was prevalent across China through much of April, as the rest of the globe was impacted by the pandemic. Lockdowns, store closings, plant shutdowns, and shortened hours of operation in the United States and Europe have driven down demand for Chinese goods, resulting in approximately 20 percent lower overall invoice value compared with 2019.

Beneath the surface of this data, there is some good news. The slumps we’ve seen thus far in China have been relatively short-lived. Chinese suppliers’ trade activity continues to be volatile compared with pre-Covid levels, but it has consistently improved since hitting the anemic lows of February. As of late May, early indicators show promise that volumes are nearing what they were in 2019.  For example, in the third week of May, volumes outpaced the same week in 2019 by 30 percent.

This introduces the possibility that after restrictions ease in the United States and Europe, the global economy may bounce back faster than most current projections suggest. Of course, changes in demand are going to play out in different ways within different regions and industry sectors. However, the data available to us now indicates that some industries’ trading activity might mimic the pattern of China. We will continue to monitor global invoicing in the next few months to see whether this speculation holds true.

Balancing Current and Future Liquidity Requirements

Plenty has been said about the unprecedented nature of this economic downturn, and the same can be said for the climb out of it. The road to economic recovery will force companies to focus on two sets of obstacles: the ones immediately facing their business and the ones they’ll encounter as demand normalizes.

In the future state—which might arrive within the next three months, by some estimates—supply chains will be under pressure to get back to “normal” quickly as governments around the world allow businesses to come back online. Some companies will have to ramp up production from zero to full steam. Others may see a longer-term reduction in demand as business normalizes. Or perhaps the global Covid-19 downturn will extend deep into 2021.

Whatever the case, it is fair to say that the transition back to business as usual (or thereabouts) will put stress on most companies’ cash reserves. In this environment, many will need to pull all the liquidity levers available to them, including using supply chain finance to provide immediate liquidity relief to distressed suppliers. A diversified funding mix will be crucial to accessing the cash required to meet current-state and future-state business requirements.

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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.