A type of asset-financing arrangement in which a company uses its receivables as collateral in a financing agreement.
Published in Chapter:
A General Introduction and Overview of Supply Chain Finance
Haoran Yue (South China University of Technology, China), Jingwen Xu (South China University of Technology, China), Jingmai Wang (South China University of Technology, China), Dilang Wu (South China University of Technology, China), and Baozhuang Niu (South China University of Technology, China)
Copyright: © 2019
|Pages: 29
DOI: 10.4018/978-1-5225-7808-6.ch001
Abstract
Supply chain finance (SCF) is a new finance service mode surrounding the core enterprises in the supply chain. Different from the traditional finance service, SCF focuses on the trading process rather than the bank credit. Depending on the large trading data and process gathered by core enterprises, SCF is able to effectively integrate the flows of information, logistics, and funds, which transforms the numerous risks of many single enterprises into the controllable risks of the entire supply chain. Therefore, SCF is capable of providing comprehensive finance service regardless of companies' size with the minimum risk level, especially for the small and medium-sized enterprises which have difficulties in receiving finance service from traditional finance institutions. The emergence of SCF has established an accessible channel to help small and medium-sized enterprises obtain effective finance service. In this chapter, the authors introduce the definition, features, structures, and other basic information of SCF. The authors then examine the different types of SCF.