Supply chain finance

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

What is supply chain finance?

Supply chain finance allows a large company to procure products or services from a large number of suppliers by extending its payment terms. It is based on reverse factoring.
Supply chain buyers and suppliers have competing financial interests: the buyer wants to pay as late as possible while the supplier wants to be paid as soon as possible. 
Supply chain finance or reverse factoring aims to reconcile those contradictory interests, by providing a range of financing and risk mitigation solutions in order to optimize working capital and liquidity within national and international supply chains. Some products are provided directly to suppliers, others through buyers. The most common solutions are credit, purchase order financing, factoring, and invoice discounting. 

How does reverse factoring work?

Reverse factoring allows a large company (principal) to offer the opportunity for its supplier to be paid as soon as its invoice has been approved and validated by the principal. More precisely:

  •  the supplier delivers his goods and issues an invoice (1)
  •  the client validates the invoice on the secure platform (2)
  •  the supplier can make an assignment of his invoice, which corresponds to requesting advance payment of the invoice (3)
  •  the bank, which is often a factor, pays the invoice in advance (4)
  •  the bank is reimbursed by the client when the invoice is due (5).

Reverse factoring life cycle


schema
Advantages of reverse factoring

For the principal:

  • Build loyalty with strategic suppliers and prevent their possible default;
  • Secure the entire supply chain;
  • Improve working capital requirements (WCR) by increasing supplier payment delays;
  • Be a Responsible Company (CSR) by supporting its suppliers, which are generally small and medium-sized enterprises (SMEs);
  • Benefit from a dematerialized solution: everything is done on a platform secured by a password for each user.

For suppliers:
•    Have access to credit (even suppliers in financial difficulty because the risk is not based on their rating but on the principal’s rating;
•    Benefit from much more advantageous rates than those they could negotiate with their bank;
•    Benefit from a dematerialized solution: everything is done on a platform secured by a password for each user.

Discover

Our Supply Chain Finance Solutions

Our latest news and insights

The Rise of Active ETFs
Insights from Sébastien Lemaire, Head of ETF Research at Societe Generale.
Expert views
Insights from Sébastien Lemaire, Head of ETF Research at Societe Generale.
The Rise of Active ETFs
Powering Electric Vehicle Adoption with Osprey in the UK
Osprey Charging is contributing to the energy transition through the rapid roll out of their EV charging infrastructure....
News & Insights
Osprey Charging is contributing to the energy transition through the rapid roll out of their EV charging infrastructure. Societe Generale acted as Arranger & Hedging Provider in the £110m in senior debt facilities transaction that will support Osprey’s charging network development in the country.
Powering Electric Vehicle Adoption with Osprey in the UK
Societe Generale gains ground in fixed income trading push
Hatem Mustapha and Francisco Oliveira are co-heading Societe Generale Global Markets business. Together, they answered...
Expert views
Hatem Mustapha and Francisco Oliveira are co-heading Societe Generale Global Markets business. Together, they answered Christopher Whittall’s questions in an article published in International Financial Review (IFR) on 4 July 2025.
Societe Generale gains ground in fixed income trading push
More results google link