A supply chain with well-funded suppliers is far more resilient, with reduced risk of suppliers failing to deliver. It also reduces a buyer’s costs associated with delayed delivery or non-delivery, and these costs can often be multiples of the value of the failed contract.
The buyer decides which suppliers are offered Purchase Order Finance and the buyer does not have to assign the procurement contract to a third party. The availability of purchase order finance at the beginning of the production or supply process increases the number of suppliers who can meet the buyer’s procurement needs. This reduces any key supplier dependency and encourages competition for contracts and innovation in supply. Invariably this reduces overall buyer costs.
Local suppliers employ people who live, work and spend locally. Purchase Order Finance brings benefit to local and regional economies by enabling a greater percentage of annual procurement to be with smaller and local suppliers.