Kalamata Capital Group is a financial technology company that provides small businesses with funding. Kalamata and its affiliates have partnered with a technology-enabled, non-bank, online financing company that specializes in supply chain finance to help facilitate the purchasing of desperately needed PPE in the United States.
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Supply-chain financing is the financing of receivables, whether via traditional factoring arrangements where suppliers sell their accounts receivable at a discount to get cash faster or via short-term loan to the buyer to pay their supplier immediately while allowing the buyer to retain traditional 30-120 day payment terms.
Given the immense demand, many PPE manufacturers are now requiring cash payments upfront before PPE manufacturing begins versus offering traditional 30-120 payment terms after goods have been delivered, increasing the importance of working capital flexibility. Demand for non-bank supply chain financing has escalated as banks have stopped providing loans to many companies, further constraining their working capital flexibility just when their needs have increased due to changes in payment terms mandated by many counterparties.
Supply chain financing alleviates the working capital constraints of all parties in the PPE supply chain including manufacturer, distributor and retailer. Specifically, supply chain financing facilitates the payment to the PPE manufacturer upfront while also offering 30-120 day payment terms to the distributor via a short term loan to the distributor. Additionally, once PPE is delivered to a distributor, supply chain financing enables “the second leg” of the PPE value chain by facilitating traditional payment terms between the distributor and end retailer via a factoring arrangement. These “back to back” supply chain financing offerings create a seamless working capital solution throughout the PPE value chain.
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