Supply chain finance: Approach with caution
For a small business, the difference between survival and default can be timeframes for payment.
Prolonged payment delays have long been a bugbear of small and medium-sized enterprises, and this is particularly true amid the current economic uncertainty.
More and more SMEs are signing up for payment agreements that are backed by supply chain finance (SCF) arrangements to meet their own payment obligations. SCF can be a viable option for early payment when the arrangement is to the benefit of both parties, but a recent inquiry by the office of the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) has found that this is often not the case.
This audio article discusses the importance of accessing advice and exercising caution when considering an SCF arrangement.