8 Must-Haves in Today’s Supply Chain Finance Solutions
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Reviewed by: Bruce Sayer
Supply chain finance (SCF) continues to gain momentum among large businesses and their cash-strapped suppliers as a valuable way to improve liquidity and strengthen working capital. Advanced fintech platforms, a focus on working capital efficiency, and shifting regulations are all fueling adoption. With more businesses focused on strengthening supplier relationships and navigating economic uncertainty, SCF has become a critical tool
When launching or expanding a SCF program, companies face a wide array of options – from traditional models to modern, platform-enabled solutions. Here are eight key things to look for when selecting the right SCF solution for your business.
Provides a Comprehensive End-to-End Solution
A broad range of supply chain finance providers coexist, each catering to different needs, but few offer a comprehensive solution that caters to the needs of various industries and a full range of sellers. The working capital needs of companies are constantly evolving and having a solution that can facilitate multiple functions like factoring, reverse factoring, and dynamic discounting can improve efficiency and speed of payment when compared to fragmented and manual solutions.
Offers Diverse Funding Sources
A solution with diverse funding sources allows buyers the flexibility to structure a program that best fits their working capital needs. With a multi-funder network, companies can draw upon the balance sheets of bank and other financial institution partners, the buyer (dynamic discounting programs) and the SaaS company itself – or a combination thereof. For example, a business could use its own funds for certain suppliers or up to a fixed amount, then use third-party funds for greater cash flow needs. Diverse funding sources also allow for greater flexibility relating to fees sellers incur for participating in a SCF program.
Analyzes Credit Risk
Risk is always a consideration of any type of financing arrangement; supply chain finance is no exception. When looking for a SCF solution, it is important to look for functionality that taps into analytics that assess factors like:
- Invoice Details,
- Seasonal Trends,
- Disputes and Discounts,
- Skipped Invoices,
- Supplier Concentrations,
- DSO and DPO Benchmarking, and
- Supplier-Buyer Relationships.
These analytics can help make predictions about:
- Bankruptcy,
- Days to Pay,
- Dilution, and
- Fraud.
Most banks do not analyze this type of risk and platform providers have no incentive to do so because they do not draw funds from their own balance sheet. With over 25 years of experience analyzing risk and the ability to use our own balance sheet, eCapital has the knowhow and motivation to provide this type of in-depth risk analysis.
Provides Insightful Reports
As supply chain financing has become a more common payment arrangement for businesses globally, the practice is coming under increased regulatory scrutiny as both governments and investors attempt to ascertain risks and potential long-term impacts. This leaves companies grappling with the issue of how to properly report supply chain financing arrangements on financial disclosures.
When evaluating SCF solutions, choose one that offers robust analytics, reporting, and customer credit monitoring. These tools provide detailed insights that can easily give investors and regulators a deeper view into a company’s true financial position.
Important reporting metrics include:
- Spend count by number of suppliers, invoices, POs by region, business unit, payment term, currency, and payment method;
- Spend amount over time by region, business unit, category, supplier, payment term, currency, and payment method;
- Supplier concentration; and
- Payment behavior, including approval days, payment terms, and performance.
Promotes Responsible Supply Chain Practices
The right SCF solution helps deepen supplier relationships and build resilience. Features like supplier visibility, scalable funding, and transparent onboarding help ensure smoother collaboration and mutual growth – even during disruption of challenging economic cycles.
Keeps Your Data Secure and Compliant
With rising cyber risks and regulatory demands, SCF providers must prioritize data security.
When looking for a solution, it is important to look for several built-in features to help protect your data, both at rest and in flight, and keep on the right side of regulations. Critical features include:
- Multi-factor Authentication,
- Bank Account Verification,
- Data Encryption, and
- SSAE-18 Compliance.
Designed for Fast Implementation and Ease of Use
If a solution is not intuitive, is cumbersome to use, or difficult to set up and get started for both buyers and sellers, there is a high probability that any program using that platform will fail due to lack of use. A successful solution allows for:
- Simple Implementation: Caters to varying technological sophistication with no-code downloadable templates, SFTP connections for larger volume invoice uploads, third-party integrations, and data sharing with AP and ERP systems.
- Rapid and Easy Onboarding: Ability to have you online in a few days, allowing invoices to be added to the system for faster payment. Invite sellers through a process that eliminates stress and paperwork.
- Intuitive Interface: Eliminates the complexity of working-capital management with a UX that delivers clarity and transparency.
Drives Seller Onboarding and Engagement
An SCF program is only as strong as its supplier participation. When deciding on a solution, it is important to consider how that solution supports supplier adoption and use. A partner provider can help you segment, price, and educate your sellers to ensure the widest adoption possible. Once aboard, the right supply chain finance solution will provide real-time support in case sellers have an issue and provide them with other funding options (like AR financing) if they have more working capital needs.
Conclusion
Supply chain finance remains a powerful tool for buyers and sellers of all sizes in a multitude of industries to boost their liquidity and overall financial health. While every company has its own unique needs and goals for an SCF program, by being thoughtful about implementation and making sure a solution checks the important boxes and can scale as your business grows, you can ensure a better chance of success in meeting your working capital requirements.
To learn more about our supply chain finance solutions, connect with our team.
ABOUT eCapital
At eCapital, we accelerate business growth by delivering fast, flexible access to capital through cutting-edge technology and deep industry insight.
Across North America and the U.K., we’ve redefined how small and medium-sized businesses access funding—eliminating friction, speeding approvals, and empowering clients with access to the capital they need to move forward. With the capacity to fund facilities from $5 million to $250 million, we support a wide range of business needs at every stage.
With a powerful blend of innovation, scalability, and personalized service, we’re not just a funding provider, we’re a strategic partner built for what’s next.
Miguel Serricchio
Miguel Serricchio is the Managing Director - Channel Development at eCapital, where he leads all sales and partnership initiatives across the business. He joined LSQ (now part of eCapital) in 2018 and has since curated many of the company's largest and most strategic referral sources, facilitated its largest invoice finance partnership, and is the company’s resident EXIM expert, spearheading the effort to create numerous Supply Chain Finance Guarantee programs for US exporters.
A 35-year veteran of B2B and international finance, Miguel has led service and technology innovation at some of the largest financial institutions across the globe, including Citigroup, and several national and regional banks in the United States. He holds a Bachelor of International Commerce in Economy/Finance from the Argentine University of Enterprise (UADE).
Miguel has also served on EXIM’s Council on Small Business, assisting SMBs with strategies to better compete in global marketplaces and guiding public policy to help American businesses.
