Supply Chain Finance

Supply Chain Finance is a vehicle for removing cost from the supply chain. The program optimizes the availability and cost of capital within a supply chain and mutually benefits buying organizations and their suppliers.

The buying organization gains access to interest-free working capital financing, which allows them to obtain longer payment terms, while suppliers are able to leverage the buyer’s favorable credit rating against their receivables and receive early payment through BB&T.

How it Works

BB&T's expertise in supply chain finance makes the process much simpler than other traditional supply chain improvement programs:

  1. The supplier ships goods and invoices the buyer.
  2. The buyer processes invoices for payment and issues approved invoices through BB&T.
  3. BB&T purchases the approved invoices from suppliers at a discount. Pricing is based on the buyer's credit profile.
  4. The buyer remits payment to BB&T on the maturity date.

Why Buyers Like It

BB&T's Supplier Finance Program can offer buyers specific benefits that can't be achieved through more traditional programs:

Finance

  • Generate cash flow to support strategic priorities for organization (acquisitions, share buy-backs, etc.)
  • Utilize your firm's favorable credit profile to assist the procurement function
  • Maximize financial stability within your supply chain
  • Enhance organizational working capital position
  • Improve cash flow

Procurement

  • Assist suppliers with working capital management
  • Improve payment terms from suppliers
  • Counter the objections in terms negotiations
  • Reward key suppliers
  • Create access to new supply sources or regions

Why Sellers Like It

BB&T's Supplier Finance Program gives you the opportunity to turn your receivables into funds needed for your business:

  • Improve operating cycle by turning receivables to cash more quickly
  • Reduce borrowing costs as pricing is based on your customer's credit profile versus your own
  • Increase advance rate against receivables to 100% for suppliers who otherwise borrow on a formula base from their lender
  • Mitigate concentration risk in receivables that suppliers carry if your customer represents a significant percentage of your sales
  • Reduce borrowing needs as receivables are carried for a shorter period of time
  • Generate the potential for increased sales with customer

Here's an example:
A buying organization issues their supplier a confirmed invoice for $100,000 that is due in 60 days. Your company immediately offers it for sale to BB&T. The cost is determined as follows:

Confirmed invoice amount x (60 day LIBOR + Program Rate) x (60 days/360 days)

In this example:
$100,000 x (0.30% + 2.0%) x 0.1666 = $341.67

How BB&T is Different

BB&T offers expertise in supply chain finance and its team has vast experience with Supplier Finance Programs for many clients. Our funding solutions are backed by the resources of one of the largest and soundest financial holding companies in the country.

For more information, contact:

Dev Maguire
404-442-5287
dmaguire@bbandt.com
Jack Sickling
404-442-5283
jsickling@bbandt.com
Pete Loescher
404-442-5006
ploescher@bbandt.com
Rebecca Tignor
404-442-5030
rtignor@bbandt.com

Get Assistance

By Phone

Contact a BB&T Commercial Finance Specialist.