Early Payment Facilitates Supply Chain Financing

Early Payment Facilitates Supply Chain Financing

In the current inflation and interest rate environment, companies are prioritizing the health of their supply chain partners as they face a perfect storm of substantial increases in commodity prices, tighter liquidity conditions and rising borrowing costs – all of which fuel cash flow management. a remarkable challenge.

A supplier survey published by Taulia earlier this year found that 38% of respondents were taking early payments in 2021 — double the number done in 2017 when the company launched its annual survey.

Early payment is seen by an increasing number of our larger corporate customers as a very effective tool to support suppliers without impacting their own cash flow

Frederick Rugginz, JPMorgan

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“Early pay is seen by an increasing number of our larger corporate clients as a very effective tool to support suppliers without impacting their own cash flow,” said Frederick Rugginz, head of supply-chain finance program management, trading and working capital at JPMorgan EMEA. .

While supply chain financing is often combined with changing payment terms, JPMorgan has seen a wave of inquiries from customers seeking to offer early payment without even opening negotiations with their suppliers.

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