GT Nexus and trade finance solutions provider Seabury TFX has announced a new funding programme that leverages Big Data on the GT Nexus platform to deliver suppliers access to low cost capital. The programme opens the flow of capital into the supply chain to reduce costs and risk by basing funding decisions on the trading partners' performance history, instead of the buyer's or supplier's credit.
GT Nexus provides a legal framework and compliance engine for B-to-B commerce that helps ensure clean and compliant transactions on more than $100 billion in global business annually.
"The high performance rate of the overall GT Nexus network of transactions makes it an attractive portfolio for securitisation in the financial markets," said Robert Lin, President and CEO of Seabury TFX. "Unlike traditional programs working with individual banks or providers on a transactional basis, funding of this program is secured by a pool of transactions on the platform. The transparency, standardisation, comprehensiveness and reliability of GT Nexus' Big Data are critical to ensuring liquidity, and thus enabling healthier and more efficient supply chain finance."
Buyers and suppliers in this program are able to remove from the supply chain capital-related barriers that can cause delays or impact customer service.
"This type of program reduces both cost and risk in our supply chain while improving overall performance," said Harry Gaffney, CFO of Charles Komar & Sons. "Our suppliers can access funding to run their business when they need it most, at key times within the transaction lifecycle -- as early as order. Access to liquidity at crucial points assures the flow of supply goes un-disrupted and improves our customer performance."
Funding is provided off-balance sheet. Suppliers can obtain cash at the same rate and terms for any qualified buyer on the GT Nexus platform.
"We can now get the funding we need earlier in the transaction lifecycle and we no longer have to wait for an approved invoice," said Adam Sutton, President of Highland Belts & Fine Leathergoods. "Cash flow visibility and payment certainty allow us to better map out our growth. We can move forward with certainty, knowing that we will have the funds needed to buy materials and fill new orders."
Traditional supply chain finance programs look at a company's profitability, cost of goods, sales figures and growth projections for the region. Collecting and interpreting data can take weeks given lack of standards in both documentation and pricing methodologies.
"Big data is revolutionising business across all industries and segments, and today we are changing the face of supply chain finance," said Sean Feeney, CEO of GT Nexus. "It's no longer a complex jigsaw puzzle of documents, data and transactional party analysis. We're deploying Big Data to open up the pipeline of capital into the global supply chain by triggering faster, smarter financing decisions based on deep analytics on the GT Nexus platform. The result is stronger and more resilient supply chains."
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