Participate in funding ESG oriented demand for suppliers of Global Corporate
8 June 2021
Working capital support is key to enabling suppliers of corporates to co-invest in ESG initiatives to mitigate environmental impacts of manufacturing, support ethical sourcing and improve the livelihoods of those in our communities.
This funding opportunity is to support the working capital requirements of the suppliers of a global retailer. This includes the vendors to that retailer, and also the suppliers to those vendors, so there is a full upstream impact.
The process flow will be to fund corporate purchase orders and vendor invoices and the subsequent invoices of the suppliers to those vendors.
A repayment obligation underpins assurance on vendor risk and is structured around the investment grade retailer. Upstream vendor/supplier risk is managed through a variety of mechanisms including an offset provision for non-payment through the vendors receivables. There is a provision for insuring the risk, if required, however the dissipation of the risk across hundreds of suppliers, and the importance of the supplier in the corporates supply chain is such that insurance could be considered very low risk.
The quantum of funding required is estimated at £100m-600m, mainly in GBP/ EUR with some limited amounts in USD, with tenor of 30 -120 days, yielding 40-100 bps depending on the level of funding capacity. Funding capacity is agreed on an uncommitted basis and can be amended/cancelled at any time with a run off period for transactions already financed.
Funds distribution and repayment are all managed through the Crossflow technology-based platform, including AI engine to optimise yields. In addition, the scheme design is vetted by independent 3rd party auditors, ensuring the authenticity of counterparties, and the underlying transactions, with the Crossflow service providing ongoing transaction monitoring.
