SCF – A Tool to Address Global Financing Gap

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Innovative Solutions to level the playing field for SMEs to access capital

Small-to-medium enterprises (SMEs) being the backbone of the growth story of any economy have been the hardest hit with the trade finance gap growing to an all-time high of $1.7 trillion in 2020. With 40% of them accounting for rejected trade finance requests, which restricts their ability to have access to capital, has led them to falter to meet the growing demand patterns, which ultimately has led to threaten their ongoing viability.

To counter tight credit access in the supply chains, large corporate buyers have sought out innovative financing solutions through supply chain finance (SCF) programs that provide a reliable, cost-effective source of cash to these SMEs.

The recent technological advancements and digitization which has encapsulated the SCF space, and with the rise of alternate lenders and fintech platforms, businesses are able to avail financing more smoothly and efficiently, creating a wider pool of opportunities and massively improving overall working capital requirements.

Technology-powered solutions delivered in form of supply chain finance, allows financiers to go beyond the onpaper credit scores and look at underlying positive factors when funding any invoice, thus reducing the dependency of the small businesses to rely on local financiers and high-cost borrowings

These solutions leverage the power of artificial intelligence (AI) to offer prospective lenders a more nuanced take on their financial situation. AI-based solutions are able to look at multiple credit risk factors on a dynamic basis, including granular factors like their day-to-day business spending and expenditure, offering better reference baseline credit health over a long period of time, in comparison to an on-paper number. These alternate credit factors also include everything from the volume of POS transactions at a store to details about the buyers’ end customers to its own social and legal history.

Apart from the digitisation and the rise of alternate lenders, ease of on-boarding customers and greater availability of funds, are making it easier and faster for businesses to avail financing than even before.

Supply chain financing is a great way to bridge the cash flow gap, and the rise of these innovative ways of lending through the SCF model is playing a significant role in empowering these SME’s and driving growth.

At Alpha Bridge we recognise the shifting dynamics and the pulse of any market. With our team of professionals, having extensive experience in identifying and navigating difficult conditions, we help businesses to recognise global supply chain drivers and help cushion them towards any unprecedented shocks arising in global markets. With our partner network of financiers and alternate funders who specialise in innovative solutions, we pioneer in providing customised solutions as per the needs of our client.

If your business is looking for a SCF solution that is driven beyond the traditional ways of finance, then get in touch with us and our team is there to create just the right kind of funding opportunity for you!

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