CSC-Blog-Supply Chain Funding_102021

Overcoming Supply Chain Shortages for Businesses with Bad Credit

The pandemic has affected everyone’s life in one way or another. If you own a business, you may very well be experiencing supply chain disruptions that are having a negative effect on your ability to serve your customers. According to a national survey done in September 2021 by the NFIB Research Center:

  • Half of small business owners reported that supply chain disruptions have a significant impact on their business, up from 32% two months ago.
  • Over half (55%) of owners impacted report that the supply chain disruption is worse than it was three months ago.
  • The vast majority (86%) of owners anticipate supply chain disruptions will continue for at least the next five months or more.

Supply chain shortages are impacting small businesses the most. Many companies lack the liquidity for increased machine or material costs, hard-to-find skill sets, and even new technology. With high demand and high prices, they aren’t able to fulfill their orders.

Enter Supply Chain Funding

Supply chain funding, commonly called reverse factoring, can provide relief from supply chain shortages. You (the buyer) can optimize working capital and suppliers generate additional cash flow. It’s not a loan, but an extension of your accounts payable, and is ideal for any business, not matter the size.

Here’s how it works:

  • Buyer purchases goods or services from the supplier
  • Supplier issues their invoice to the buyer with a payment due date
  • Buyer approves invoice payment
  • Supplier requests early payment on the invoice
  • Funder sends payment to the supplier
  • Buyer pays the funder on the due date on the invoice

Your Benefits

In addition to optimizing your working capital, using supply chain funding will help you maintain a healthy balance sheet, improve the health of the supply chain, strengthen relationships with suppliers, and work with complex end-to-end supply chains. It also promotes competition and diversity in suppliers.

What If Your Credit is Bad

If you think supply chain funding is only available to companies with pristine credit, you’d be wrong. At Clear Skies Capital, we’ve worked with many business owners who had less than stellar credit, helping them overcome supply chain shortages with supply chain funding designed for their specific situation. As an alternative lender, we enter into every relationship with a mindset to say “yes,” unlike traditional lenders like banks.

The Takeaway

The pandemic has done a number on so many businesses, but you don’t have to be a victim. If you are impacted by supply chain shortages and need funding, we may be able to help, even if you have less than perfect credit. Contact us — you’re under no obligation — so we can discuss different ways to get you the custom financing solution that best suits your business needs.

Want to discuss supply chain funding with experts who’ve helped countless owners over the years? Contact Clear Skies Capital at 1-800-230-9822 or visit us online to learn more.