In the current inflationary and rates environment, corporates are prioritizing the health of their supply-chain partners that are facing a perfect storm of substantial increases in raw-material prices, tightening liquidity conditions and rising borrowing costs – all of which make cash-flow management a notable challenge.
A supplier survey published by Taulia earlier this year found that 38% of respondents were taking early payments in 2021 – double the number that were taking them in 2017 when the company started the annual survey.
Early payment is viewed as a highly effective tool by an increasing number of our larger corporate clients to support suppliers without impacting their own cash flow
“Early payment is viewed as a highly effective tool by an increasing number of our larger corporate clients to support suppliers without impacting their own cash flow,” says Frederick Rugginz, EMEA head of supply-chain finance programme management, trade and working capital at JPMorgan.
While supply-chain finance is often combined with payment term amendments, JPMorgan has seen a surge in enquiries from clients looking to offer early payment without even opening negotiations with their suppliers.
DBS
