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Silja Calac, Head of Private Debt Mobilization GTB Europe at Banco Santander explains supply chain finance and how it works. 🎙️ Recorded in partnership with ITFA Education Day, held in London
Key Topics
- Supply chain finance as a range of financing approaches
- Working capital and liquidity management across the supply chain
- Open account trade and transaction based financing
- Risk management between buyers, suppliers and financiers
- The evolution of supply chain finance into more complex structures
Key Insights
Supply chain finance is not a single solution
It brings together a range of techniques that can be tailored depending on the structure and needs of a transaction.
Managing the cash flow gap is essential
There is always a delay between paying for inputs and receiving payment for finished goods, and this gap needs to be funded.
Financing is linked to real trade events
Moments such as invoicing, shipment or payment create opportunities to apply different financing tools.
Partnerships sit at the heart of it
Successful programmes depend on alignment between buyers, suppliers and finance providers.
Expert Analysis
Silja Calac explains that supply chain finance is best understood through the definition set out by the Global Supply Chain Finance Forum. Rather than being a single product, it is a combination of financing and risk management techniques designed to improve the flow of working capital. In practice, it is most often used in open account trade, though it can also involve other instruments such as bills of exchange. What matters is how these tools are applied across the different stages of a transaction. She highlights that each party has a clear objective. Buyers are looking for reliability and continuity of supply. Suppliers need access to liquidity. Financial partners step in to manage risk and provide funding. Over time, supply chain finance has moved well beyond simple structures. What began with straightforward forfaiting has developed into more sophisticated models, including deep tier programmes and receivables based financing. This shift reflects its growing importance in supporting trade and strengthening balance sheets.— Silja Calac
Key Findings
- Supply chain finance strengthens stability within trading relationships
- The gap between payment and receipt remains a core challenge
- Different financial tools can be used at different stages of a transaction
- Reducing risk is as important as providing funding
- Ongoing innovation is expanding how supply chain finance can be used
Implications
- Wider use of supply chain finance is likely to ease pressure on working capital across supply chains
- Banks and financial institutions will continue to play a central role in structuring solutions
- Event driven financing will allow funding to be applied more precisely at different stages
- More complex structures will open up additional sources of capital
- Stronger cooperation between participants will be key to making programmes effective
Key Takeaways
- Supply chain finance is a practical tool for improving cash flow
- It combines funding with risk management across transactions
- Liquidity and stability are shared priorities for all parties involved
- Financing can be applied flexibly at different points in the trade cycle
- The market continues to develop, offering more advanced solutions over time
