HNB FINANCE’s new Supply Chain Financing facility

HNB FINANCE, recently launched a new Supply Chain Financing scheme designed to meet the critical financial needs of businesses imposed by the stringent market demands of a pandemic-stricken economy.

“This scheme leads the market by the exceptional amount of value it is able to deliver to businesses, as it is a revolving facility designed to optimise and sustain an uninterrupted supply chain process and cash flow for both buyers and suppliers,” the company said in a media release.

The financing scheme enables manufacturers to purchase from suppliers at a higher discount as payment for material is immediately settled by HNB FINANCE. The company will step in to absorb the credit period and pay the supplier immediately. This enables suppliers to maintain and enhance their liquidity, while customers are thereafter given a generous credit period of up to 120 days with minimal interest to pay of f their costs to HNB FINANCE.

"As an organisation that has always strived hard to innovate to meet the demands of the rapidly evolving market, the new facility aims at easing the working capital requirement of businesses feeling the dire implications of a pandemic-stricken market. The beginning of the pandemic forced suppliers to limit their offerings to organisations who are able to pay cash at the time of purchasing raw materials, leaving many businesses who depend on these suppliers to limit their operat i o n s. Therefore, we are confident that our product offers a practical approach to neutralize these challenges as it was carefully curated to create a winwin situation for both companies and suppliers, to improve their cash flow in a sustainable, convenient and smart manner,” said HNB FINANCE Chief Executive Officer & Managing Director Chaminda Prabhath.

Once an invoice is issued, suppliers are able to receive payment within 24 hours and are no longer subjected to lengthy payment terms that are usually imposed on credit customers. This enables customers to recover the interest rate paid to HNB FINANCE, indirectly in the form of a discount, the release said.

Since it’s a revolving facility, customers can also enjoy a longer credit period and reuse the same funds to purchase new raw material after the outstanding has been paid off. Further, customers can seek higher discounts from suppliers as they are able to pay in cash at the time of purchase, which brings a direct positive impact to the bottom line, strengthens business relationships and encourages consistent, quicker material delivery from suppliers.