By: Arpana Amin, Global Product Head of Supply Chain Finance, HSBC Global Trade Solutions

In today’s macroeconomic landscape, global corporates are navigating a variety of complex challenges. The pressure of shifting trade policies, geopolitical uncertainty, persistent inflation, and regulatory churn flows directly into the heart of supply chains, driving up costs, extending payment cycles, and putting a strain on liquidity. For treasurers and finance leaders, the question is no longer whether to optimise working capital, but how to do so effectively.

A perfect storm for working capital

The most immediate challenge for many corporates is liquidity. Elevated interest rates have made short-term borrowing materially more expensive, making treasurers increasingly reluctant to rely on traditional credit lines. At the same time, the post-pandemic shift from just-in-time to just-in-case inventory management means stock sits on balance sheets for longer, tying up cash that could otherwise be deployed elsewhere. But it’s not just about cash flow – compounding these issues are longer supply chains and slower collections. As payment terms stretch and receivables drift out, the tension on working capital intensifies.

In HSBC’s recent Trade Pulse Survey, 62% of businesses have experienced increased pressure on cash flow and liquidity since 2024 due to trade and tariff uncertainties. While 67% are feeling more certain about how these trade policies impact their operations compared to six months ago, businesses are having to adapt to a new normal and implement coping strategies, including passing costs to customers, improving operating efficiency, negotiating supplier costs and terms, delaying or bringing forward investment decisions, reducing headcount, and implementing automation.

The result is a scenario where liquidity is under strain, and the mechanisms designed to support it may feel disjointed and insufficient.

The need for integrated, buyer-led solutions

In this context, banks have a critical role to play – not just as providers of credit, but as partners in facilitating more efficient, resilient supply chains. Supply chain finance (SCF) has become a powerful tool to address these challenges, offering a buyer-centric solution that unlocks value for both buyers and suppliers.

At its core, SCF enables suppliers to receive early payment on their invoices, funded at the buyer’s cost of credit rather than their own, often higher, funding rates. Far from just being a matter of convenience, this is a strategic lever that can release trapped cash, reduce financing costs, and stabilise supplier relationships. By leveraging the buyer’s stronger credit profile, suppliers gain access to cheaper, non-recourse financing, while buyers can negotiate improved payment terms or cost reductions, optimising their own working capital.

Shifting expectations for treasurers

Treasurers today are looking for more than just transactional solutions. They expect banks to provide integrated platforms that connect seamlessly with their existing ERP systems, offering real-time visibility into invoice status, payment flows, and supplier behaviour. This data-driven approach enables more nuanced planning and informed decision-making, allowing treasurers to actively manage working capital rather than react to downstream pressures.

Flexibility is also key. Treasurers want solutions that can be tailored to their supplier base, segmenting strategic partners from the long tail and matching the right tool to the right need. For example, structured SCF programmes can be prioritised for critical suppliers, while dynamic discounting can be used to self-fund early payments for others or a cards program can be offered to tail end suppliers. The art lies in orchestration – bringing together trade, payments, and technology in a coherent, collaborative framework.

Above all, treasurers expect partnership. They want banks that understand the broader context of their business, who can advise on best practices, and who are accountable for the success of the programme over its lifetime. This means dedicated programme management, ongoing support, and a willingness to innovate as needs evolve.

Fulfilling client and customer needs: beyond cost savings

The benefits of SCF extend well beyond immediate cost savings. Clients – both buyers and suppliers – are increasingly aware that their stability is intertwined. The health of the supply chain is a shared concern, not just an internal optimisation exercise. Buyers recognise that their own resilience depends on the financial health of their suppliers. This has driven a shift away from one-off payment term extensions towards more thoughtful, long-term support linked with sustainability

For suppliers, it is a lifeline that can increase production capacity, enable just-in-time delivery, and reduce the risk of non-performance due to working capital constraints. They need predictable cash flow and access to affordable funding. They also expect solutions that are easy to access, require minimal documentation, and provide transparency throughout the process.

Moreover, SCF enhances buyer-supplier relationships, fostering trust and collaboration in an environment where predictability is at a premium. By sharing the economic value released through lower financing costs, both parties are better positioned to weather volatility and invest in growth

A strategic imperative

In a world of rising costs and relentless volatility, supply chain finance is no longer a tactical afterthought – it is a strategic imperative. Banks that can deliver integrated, data-driven, and client-centric SCF solutions will be the partners of choice for treasurers seeking to reclaim control of their working capital and build resilient, future-ready supply chains. The time to act is now; the opportunity is too great to ignore.