PM announces scheme to ease suppliers’ cash pressure

Supply Chain Finance (SCF) provides a route via which large companies help smaller links in their supply chain access credit and improve cash flow at a lower cost. The methodology has already been successfully implemented by companies including Rolls-Royce and Jaguar Land Rover. With Supply Chain Finance, a bank is notified by a large company that an invoice has been approved for payment; the bank is then able to offer a 100% immediate advance to the supplier at lower interest rates, knowing the invoice will ultimately be paid by the large company. Reports suggest that leading companies could deliver up to as much as £20 billion of new cheaper, finance to their suppliers, including many UK SMEs. Cameron said: "This government is determined to back all those businesses who aspire to get ahead and take on more people. In the current climate, viable businesses can struggle to get the finance they need to grow – this scheme will not only help them secure finance and support cash flow, but will help secure supply chains for some of our biggest companies and protect thousands of jobs. It can be a win-win, with large companies and small suppliers both benefiting from this innovative scheme."