Anchor-led supply chain finance
An anchor is an established business that buys from regular suppliers or sells through regular dealers. PayLedger funds those businesses on the strength of the trading record with the anchor.
Trade is limited by available capital
Suppliers and dealers that are short of working capital trade less with the anchor than the relationship could support.
This rarely looks like a credit problem. A supplier turns down a larger order, unable to wait out the anchor’s payment terms. A dealer buys less stock, unable to pay for more upfront. Nothing defaults, and nothing shows up in the anchor’s accounts. The trade is simply smaller than the relationship allows.
A programme places funding at exactly that point, and assesses the risk on a trading relationship that already has a record.
Two facilities, either side of the trade
Short-term facilities for B2B trade, with tenors of 30 to 120 days. Available within an anchor programme.
Invoice discounting
The supplier is paid against the invoice, ahead of the buyer’s due date.
Buyers in B2B trade settle 30 to 120 days after invoice. The supplier meets the cost of producing and delivering the goods at the outset, and each further order increases the receivables outstanding. The facility pays the supplier against invoices raised on approved buyers. The buyer pays on the original due date, on unchanged terms.
The supplier’s working capital is not tied up for the length of the anchor’s credit period.
- Bridging extended credit periods
- Meeting freight, wages and overheads
- Redeploying cash into the next cycle
Flow of funds
Purchase financing
The supplier is paid in full at the point of order, and the buyer repays at the end of the agreed credit period.
Larger orders lower the unit price, but the supplier expects payment before the stock has been sold. The facility pays the supplier against the confirmed order, and the goods are delivered to the buyer. Repayment falls due at the end of the credit period, by which point the stock has sold.
The dealer can place orders beyond the cash position available, and the anchor/supplier is settled on dispatch.
- Procurement at volume pricing
- Settling suppliers to agreed terms
- Restocking ahead of peak demand
Flow of funds
How we work
From first review to a live programme, drawing against invoices already raised and orders already confirmed.
- 01
Scoping
The anchor’s suppliers and dealers are reviewed: how many there are, the credit periods in place, and the volume a programme would carry.
- 02
Structure and onboarding
A term sheet sets out the structure and the limits. Each supplier or dealer is then onboarded separately, and assessed on the trade with the anchor alongside the business’s own financial records.
- 03
Programme live
Suppliers draw invoice discounting against invoices already raised on the anchor. Dealers draw purchase financing against confirmed orders. The programme is reviewed with the anchor on an ongoing basis.
Anchor eligibility
What a programme requires of the anchor.
- ₹25 Cr+
- Annual turnoverReported turnover of ₹25 crore or above in the most recent financial year.
- 6 months
- Trading historyA minimum of six months of payment history with the businesses a programme would cover.
- 30–120 days
- Trade tenorRecurring B2B trade on credit terms of 30 to 120 days from invoice date.
Criteria are indicative and describe the anchor rather than a single borrower. Meeting these criteria does not constitute approval of a programme, or of any business within a programme, and every facility remains subject to credit assessment and to the applicable terms, conditions and documentation.
How much cash sits in unpaid invoices?
Move the two sliders to see what a given credit period holds at any one time.
The arithmetic
₹1,00,00,000 a month is ₹3,33,333 a day. At 60 days to be paid, 60 days of billing are outstanding at any moment.
Sitting in unpaid invoices
₹2 Cr
₹2,00,00,000
On 30-day terms the same book would tie up ₹1 Cr. The longer credit period accounts for the other ₹1 Cr.
Illustrative only. Assumes a 30-day month with billing spread evenly across the month. This is not an offer of finance, an eligibility calculation, or financial advice.
Set up a programme
Set up supply chain finance programmes for buyers and suppliers within an anchor ecosystem.
Discuss a programme