Supply Chain financing entails providing a structured finance facility to a SME based on the support of a parent/corporate entity. This facility is usually made available to businesses where stand-alone financing might not be warranted. However, an underlying credit support (in the form of a guarantee, letter of support or an effective stop sale agreement) from a parent company, a structured facility could be granted to SME.

The structured supply chain financing may involve one or more following arrangements:

• Letter of Comfort / referrals from the parent company
• Support of parent company on routing of cash flows (payments being made to suppliers) through us – assignment of receivables
• Support by the parent company through delisting of defaulted supplier and helping banks in recovery efforts

 Salient Features

• Availability of structured financing to SMEs
• Lower pricing as compared to pricing in stand-alone cases
• Quick processing of finance application
• Relaxed collateral requirements