For suppliers
Reverse factoring
The anchor initiates the program and its whole supplier base can draw on it, at pricing that reflects the anchor’s credit rather than each supplier’s.
The facts
- Who owes the money
- The anchor.
- Who decides
- Your financier, on each invoice your anchor confirms.
- What you need
- A place on your anchor’s program, and an invoice it has confirmed.
- How the cost is shown
- A discount on the confirmed invoice, priced on the anchor’s credit rather than on yours. You are paid the invoice value less that discount.
- Who can offer it
- It depends on your program.
How it works
Who owes the money: Under Reverse factoring, your anchor carries the obligation and settles with the financier. You are not borrowing against your own balance sheet.
Step 1 of 6Anchor: sets up the program with a financier and invites its supply base onto it.
- A document
- Goods
- Money
Read the steps
- Anchor: sets up the program with a financier and invites its supply base onto it.
- Supplier: delivers the goods and invoices the anchor.
- Anchor: confirms the invoice with an irrevocable payment undertaking: its commitment to pay that invoice on the due date.
- Supplier: chooses to sell the confirmed payment to the financier.
- Financier: pays early, at a discount that reflects the anchor’s credit.
- Anchor: pays the financier on the due date.
More about Reverse factoring
Beside the other products for suppliers
Under Reverse factoring, your anchor carries the obligation and settles with the financier. You are not borrowing against your own balance sheet. Under Purchase order financing and Invoice discounting, you carry the obligation, the financing is with full recourse: if your anchor does not pay, or you do not deliver, you must repay. What the arrangement is in your program is set out in your financier’s documentation.
What the documented framework says
Each statement is taken from the platform’s documented agreements and names the clause it rests on. Your own program’s documents govern, and none of this is legal advice.
On anchor-confirmed invoices you sell the payment outright. If your anchor later fails to pay, that is the financier’s exposure and not yours, unless the invoice was not genuine, was already promised to someone else, or there was fraud. This is true of reverse factoring on confirmed invoices. It is not true of the other two supply-side products, and the screen names your product before you trade.
Supplier Master Participation Agreement, clause 2.3
Before every trade you see the product, the amount payable to you, every deduction: financier discount, platform fee, VAT, and the effective annualized cost.
Supplier Master Participation Agreement, clause 1.2
Who can offer it, and how this page was checked
Which financiers offer this with your anchor is confirmed program by program. Ask us and we will tell you who offers it for yours.
This description has not yet been checked against the program documentation for this page. Where it and your financier’s agreement differ, the agreement governs.