SCF is a fortune 500 best practice.
For the past 15 years, Supply Chain Finance has become a Fortune 500 best practice. As supply chains become more and more digitally oriented, more and more Fortune 500 manufacturers, distributors and retailers implement SCF.
In recent years, companies like Walmart, Lowes, Cargill and others launched a SCF program to help their vendors cope with extended payment terms.
Why is SCF so common among fortune 500s?
A combination of three factors:
1. A ‘no-brainer’ value proposition: A free working capital boost. Here’s how it works.
2. Quick, easy implementation: SCF does not require a heavy ERP implementation, and the vendor communication is done by the SCF provider, eliminating this friction from the buyer’s shoulders.
3. Because they can! Unlike their midcap peers, Fortune 500s are offered SCF by their relationship banks. Today, only the largest banks (Bank of America, Wells Fargo, Citi, JP Morgan and a few others) have a digital SCF solution.
What is the impact of SCF being so common with the global giants?
Fortune 500s that introduce SCF programs to their vendors typically stretch payment terms.
When a Fortune 500’s midcap vendor try to stretch / extend terms with its own vendors to balance its own working capital stress, SCF is not available to it in order to reduce friction from their vendors. This is because the largest banks that have a digital SCF platform do not offer it to midcap clients, while the smaller banks that focus on midcaps, do not have a digital SCF platform at all.
As a result, the capital efficiency created by SCF does not drill down to the smaller companies!
This is what Quartix solves.
What does Quartix do?
Quartix offers an SCF proposition that’s tailored to the middle-market (midcap) space — companies with sales between $75M-$5B. With Quartix, midcap buyers, and their vendors, may boost their financial performance via a fully digital platform that interfaces with most commercial ERP systems.