Multi Banking Platform

Multi-Funding Structure: The Best Practice in Supply Chain Finance

As every company’s supply chain is of strategic importance and due to the fact that the funding in Supply Chain Finance programs is uncommitted, the funding structure is very critical. A company can either control its funding by using a bank-independent platform or can use a bank proprietary system, which allows less flexibility and can result in higher risks.  Both structures are marketing their “multi-funder”feature, but there are some crucial differences between both setups.

Bank Multi-Funder Platform:

  • If the main funder cannot buy the receivables, then the participating banks cannot finance either
  • The buyer has limited transparency about pricing and suppliers end up having to pay more in rates
  • The main funder controls the funding parameters (e.g. geographies, price, currencies, tenor, minimum sell offer…)

SCiSupplier Multi-Funder Platform:

  • If one bank cannot fund, the buyer simply chooses another one which can buy the receivables and support financing
  • The buyer has full transparency about UbiQ Innovations and the bank’s pricing. Supplier ends up paying less on rates
  • If one bank decides to stop or reduce funding, it is easily replaced with another financial institution within weeks

 

By offering a multibank financing model that is not dependent on any one bank relationship, UbiQ Innovation’s give buying organizations the control and flexibility required to unlock more cash from their supply chains. 

That control provides the buyer with an  innovative say in who funds their program versus having a bank decide who funds them. The uniqueness of the OpenSCi suite is that offers our clients to simply add new funding partners such as banks, non-bank funders and even have the opportunity and the choice to be able to fund their programs themselves. 

 

Single Bank Vs SCiSupplier Multi-Bank

When setting up a supply chain finance program, corporations should consider the following:

 

  •  Supplier Penetration

Single Bank: Supplier qualifications determined by lead bank will exclude some group of suppliers (geographies, currencies, credit profiles, tenors, etc.). 

Multi-Bank: No supplier restrictions. Ability to bringing additional funders with different

supplier qualifications to cover all suppliers in all relevant geographies.

 

  •  Onboarding Speed

Single Bank: Does not leverage web-based technologies, microsites, electronic documentation, etc.. They rely on paper-based processes and require the buyer to onboard the suppliers. 

Multi-Bank: Maximized penetration through the use of web-based technologies for supplier marketing, registration, and training sites. Help reduce bank documentation and KYC requirements to improve supplier onboarding.

 

  •  Liquidity Sustainability

Single Bank: Can change credit appetite for buyer and/or industry. Also, banks re-evaluating strategies may decide to exit business, which would result in the closure of the Supply Chain Finance program.

Multi-Bank: Can bring in new banks to meet any liquidity shortfalls due to banks losing credit appetite in Supply Chain Finance programs.

 

  •  Liquid Scalability

Single Bank: Limited to banks in syndicate managed by the lead bank. Banks only work with limited partners who are not competitors in the market.

Multi-Bank: Unlimited funders, buyers can choose any bank or non-bank structure where the bank has direct access to the buyer and the suppliers.

 

Are you interested in learning more?
To obtain more information as either a client or a partner, please contact us today. A UbiQ Innovations representative will answer all of your questions.

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