Working Capital Finance We believe that attractive yields can be achieved in short tenor investment
Why Supply Chain Finance
Providing expertise and infrastructure in technology driven Working Capital Finance programmes, Crossflow can offer finance to the Seller of the goods once the invoice has been accepted and approved – creating an obligation to settle the invoice upon the Buyer. The Buyer is a large typically IG rated Corporate. The funding provider (the Funder) receives an assignment of the right to the payment from the Corporate for that invoice in return for a small discount which is agreed by the Seller. The Funder receives payment for the full value of the invoice from the Buyer on the date the invoice is originally due to be paid to the Seller. The Funder offers to buy the right to the entire payment due to the Seller for a discount.
Credit Risk
Whilst from a cash perspective the Funder is providing liquidity directly to the Seller, the payment obligation and hence credit risk, is against the Buyer. From a Funder perspective, Working Capital Finance can provide an alternative mechanism to organically built up exposure to a credit. An approved non repudiable invoice uploaded to Crossflow by a Corporate creates a binding legal obligation on the corporate to pay in full. Crossflow auto allocates investors to the funding opportunity based on pre-agreed funding parameters. The Corporate customer settles the invoice with Crossflow on the due date and automatically reconciles the payment with the invoice and repays the investor.
Benefits and Values
Crossflow Working Capital Marketplace is an AI driven service offering access to finance for global businesses through the automated Crossflow platform. Access to the capital is offered within 48 hours and the transparent optimal cost of finance is based on an AI price engine matching the capital demand to the best available supply of the funding including combined factors for that match. Funders joining the service may quickly and securely expand their investment portfolio without investing in new systems and processes. Crossflow's AI technology-powered platform matches borrowers with the funder’s specific investment criteria for automated lending, and optimised yield based on borrower’s behaviour. Key Benefits:
- Access to multi-bilion market
- Yield optimisation against the utilisation of funding capacity
- Risk control by automation of the processes and enforcing credit control and limits
Opportunity size and access
Global top 2000 corporates represent over $24trillion payables. Based on UK Government records of large companies in UK only, only 7% of these entities operate a supply chain finance programme, demonstrating the scope for growth within the space.
Crossflow provides a portal to review investors' funds deployed via a trade management system that provides full transparency of the funding utilisation and deployment at any time. A dedicated relationship manager will be appointed to assist with the Crossflow service.
Key Programme Features for Funders
As a Funder with Crossflow you can tailor your exposure according to your own risk profile. We can tailor:
- Name specific selection – Funders can choose which Corporates to take exposure to
- Maximum exposure – set notional limits
- Yield targets – set minimum and maximum pricing
- Tenor – specify how long funds may be committed for on an individual Assignment
- Currency – select which currencies to fund
- Sector – choose not to fund Suppliers that may not be aligned with ESG mandates.
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Funds protected in Crossflow Bank Account
Whilst Crossflow Bank Accounts are not covered by the Financial Services Compensation Scheme, we do safeguard funds in a regulated bank account, which is separated from any company funds and held in trust. This means that if Crossflow went into liquidation or bankruptcy, no third-party would have a claim over it and it would be returned to the funder.