Since the client opens the process, it is their responsibility and, therefore, the interest claimed for the deduction is less than what would have been given to the supplier if he had done it alone. The customer will then benefit from part of the benefit realized because he is the one who allows it. And the financier, for his part, will make his profit and create a lasting relationship with both the supplier and the customer. The still rare method of reverse factoring resembles factoring in that it involves three players: the customer, the supplier and the postman. Like basic factoring, the objective of the process is to finance the supplier`s claims by a financier (the postman) so that the supplier can immediately cash in the money for what he has sold (less an interest than the factor deducted to finance the advance of the money) [citation required]. Some of the products that could be sold under the Global Supply Chain Financing banner, but are not limited to: 1) Global Asset-based Lending (GABL) – Allows small and medium-sized enterprises to monetize offshore or transit inventory. The result is an increase in liquidity for this category of borrowers, 2.) Inventory Financing – Allows companies that supply large buyers to finance the inventory needed for buyer management. The result is an improvement in the net cash conversion cycle for the buyer and at the same time makes capital available to the supplier at a reduced rate. 3.) Debt Management Services – Provides external outsourcing of debt management and collection process. It also provides financing for these receivables and guarantees for the payment of these receivables.
4.) Payables Discounting – Offers third-party outsourcing of the payment process and uses a buyer`s credit quality to obtain advantageous financing rates for suppliers. The result is a lower cost of capital for the supplier, some of which can be passed on to the buyer. 5) Insurance – Others minimize business risk through freight, credit and transaction insurance. Reverse factoring allows all suppliers to be collected in a single funder and thus pay a company instead of a large number, making it easier to manage the bill. The relationship with suppliers benefiting from reverse factoring will be improved as they receive better funding and delays in payment will be reduced; The customer in turn receives some extra money, which is reversed by the postman, and pays his bills until the due date.