Insights · Analysis · for anchors, financiers
Working capital on both sides of an anchor’s trade
Much of the cash a large company’s trade depends on sits with the businesses on either side of it. Supply chain finance reaches both.
Mtaji Insights
Published 30 October 2026. 3 min read.
Written by the Mtaji Insights desk and checked against Mtaji’s product terms and publication rules before release. Editorial standards
In brief
- Suppliers waiting to be paid and distributors short of stock money are both working capital problems for the anchor.
- A program pays suppliers early and funds distributors’ stock without the anchor lending or changing its payment terms.
- What kept this to the largest suppliers was the cost of running it, and that is the part a platform changes.
An anchor’s working capital is usually discussed as its own: how long it takes to collect, how long it takes to pay, how much stock it carries. Yet much of the cash its trade depends on sits outside its balance sheet, with the businesses on either side of it.
Where the cash waits
Upstream, a supplier that has delivered waits for its invoice to be paid on the anchor’s normal terms. Downstream, a distributor that could sell more of the anchor’s goods buys only what the cash in hand allows. Both are working capital problems, and both limit the anchor: a supplier short of cash delivers less reliably, and a distributor short of cash orders less.
Supply chain finance addresses both with the same raw material: the trading record the anchor already holds.
Suppliers paid early, while the anchor pays on time
When the anchor approves an invoice, a financier can pay the supplier before the due date and collect when the invoice falls due. Under reverse factoring the anchor carries the obligation and settles with the financier on the due date, so the price reflects the anchor’s credit rather than each supplier’s. The supplier is paid sooner, and the anchor pays on the date it always would have.
The same approval supports other structures. Under invoice discounting and purchase order financing the supplier carries the obligation, with full recourse, and the anchor confirms and routes payment. These reach suppliers outside a reverse factoring program, but they are credit to the supplier, priced and secured as such.
Distributors stocked on the strength of the relationship
Distributor finance lets a distributor buy stock from the anchor with a facility from a financier. The financier pays the anchor for the stock, and the distributor repays on the agreed date whether or not the stock has sold. It is a credit facility to the distributor, with recourse to the distributor. Access depends on several factors, including the distributor’s past performance with the anchor and its own M-Score.
For the anchor, a distributor can order to demand rather than to the cash it holds, and the anchor is paid for the stock by the financier.
What the anchor gives, and what it keeps
A program does not ask the anchor to lend, and it does not require it to change its payment terms. Mtaji never lends: the credit decision and the balance sheet stay with the financier. The anchor contributes confirmation: an invoice approved, an order dispatched. In return its suppliers and distributors have more room to perform, and it sees more clearly where cash is trapped in its network.
The anchor also decides who takes part. It can run a program with its own bank, with the financiers on the platform, or both.
Why this used to be hard to run
None of this is new in principle. What kept it to the largest suppliers of the largest companies was the cost of running it: onboarding many small businesses, confirming each invoice or order and tracking each repayment cost more than a small ticket could bear. When the anchor’s data, the confirmations and the financier’s decisions run on one platform, that cost falls, and a small invoice or stock order can be financed beside a large one.
The financial logic was always sound. The constraint was operational, and that is the part technology changes.