Products

Accounts receivable (A/R) based products

Receivables servicing

How does it work?

  • GSCF assumes the daily administration tasks related to the management of trade receivables of a business, including invoices & credit notes processing, reconciliation of buyer payments, management of individual buyer limits, dilution tracking, credit analysis, rating & monitoring of buyers´ performance, automatic alerts and notifications of due and late payments, amongst others.
  • No third-party financing is involved.
  • If there is credit insurance covering the receivables, GSCF ensures that the company stays compliant at all times with the conditions of the policy. These conditions are entered into the platform and invoices are processed after undergoing real-time validation checks. If required, GSCF can also assist in obtaining credit insurance cover on the receivables portfolio being serviced.

Benefits

  • Gain administrational efficiencies by outsourcing all credit and collections tasks.
  • Achieve complete transparency over trade receivables, with information available 24/7 in real-time through GSCF´s dedicated web portal (GIS).
  • Reduce credit and operational risks.
  • Obtain credit risk cover on all or selected trade receivables through GSCF.

 

Who can use it?

Companies with sizeable open-account trade receivables looking to streamline credit and collections tasks and enhance risk management.

Factoring

How does it work?

  • A company (Supplier) sells its trade receivables related to a predefined portfolio of account debtors (Buyers) to a third-party liquidity provider (Funder), which accelerates the collection to the Supplier at a discount.
  • The Funder purchases the receivables, assumes the credit risk related to the Buyers and collects from them at invoice maturity.
  • Buyers are either aware of the program (disclosed) or unaware (undisclosed) according to the Supplier’s requirements
  • Funders typically require some level of recourse back to the Supplier and may obtain credit insurance cover over the Buyer non-payment risk.
  • If the program achieves “True Sale” accounting treatment, the Supplier can remove the factored receivables from its Balance Sheet.
  • The Supplier and Funder execute a Receivables Sale and Purchase Agreement (RPA).

Benefits

  • Increase cash flow by accelerating receivables collections.
  • Transfer credit risk to a Funder.
  • Achieve Balance Sheet benefits through reduced Days Sales Outstanding (DSOs), if “True-Sale” is achieved on the receivables sold.

 

Who can use it?

Companies with a high-volume of sales to a portfolio of credit-worthy Buyers, seeking attractive short-term financing, reduced credit risk and an enhanced Balance Sheet.

Distribution financing

How does it work?

  • Distribution Financing is GSCF’s signature product and is the most comprehensive solution, establishing a win-win scenario for the sponsoring company (Supplier) and its chosen Buyers.
  • The Supplier receives early payment on the related receivables and transfers the credit risk to the program Funder. Buyers obtain extended payment terms, eventually paying the Funder upon maturity.
  • These programs are typically credit insured and require some recourse to the Supplier – usually between 5-10% of the overall program limit. GSCF can also structure “non-recourse” programs if required.
  • The Supplier and Funder execute an RPA and Buyers sign a Payment Agreement.
  • Distribution Financing is also known as “Channel Financing” or “Sales Financing”.

Benefits

  • Achieve increased competitiveness by offering selected Buyers an extension in payment terms.
  • Increase sales and enhance customer relationships.
  • Improve cash flow, and that of Buyers, by accelerating receivables collections and extending Buyer payment terms off-Balance-Sheet.
  • Balance Sheet improvements for Supplier (via reduced DSOs), and for Buyers (via increased DPOs).
  • Reduce credit risk on Buyers.

 

Who can use it?

Companies with high-volume sales to a portfolio of credit-worthy Buyers, seeking increased sales through enhanced competitiveness, attractive short-term financing, reduced credit risk and an enhanced Balance Sheet.

Accounts payable (A/P) based products

Supplier financing

How does it work?

  • A sponsoring company (Buyer) establishes a program in order to extend payment terms towards its Suppliers
  • The Suppliers sell their receivables related to this Buyer at a discount to a program Funder. Resulting from this sale, the Suppliers receive increased cash flow and reduced credit risk
  • Instead of the Buyer paying their Suppliers for these invoices on the previous maturity date, the Buyer now pays the Funder at a later date
  • Financing is based on the credit risk of the Buyer who is typically a well rated organisation
  • Each Supplier executes an RPA with the program Funder, who on-boards the Suppliers into the program.

Benefits

  • Buyers achieve optimized working capital by extending payment terms towards Suppliers (increase DPOs)
  • Suppliers obtain reduced DSOs and receivables-based financing at convenient rates.

 

Who can use it?

Typically suited to large, well rated companies seeking to optimize working capital and who have many Suppliers.

Trade payables financing

How does it work?

  • Individual credit facility provided by a Funder to a company (Buyer) with the aim of extending its payment terms towards one or more of its key trade Suppliers.
  • The Funder pays the Supplier on behalf of the Buyer at the invoice maturity date, or earlier if there is a cash discount available. On the newly agreed upon payment term, the Buyer pays the Funder the total invoice amount plus a program fee, less the value of the cash discount (if applicable).
  • Suppliers are not legally involved in the program, only acknowledging that the invoice payment is made by the Funder on behalf of the Buyer.
  • The Buyer and Funder execute a Supplier Trade Settlement Services Agreement.

Benefits

  • Extend payment terms towards key Suppliers who do not currently offer such extensions, thus extending overall DPOs.
  • Fast implementation, with light documentation requirements.
  • As Suppliers are not legally involved, Buyers have the freedom to implement a truly tailored program.
  • The program can be classified as Accounts Payable rather than Short-term debt, depending on the Buyers jurisdiction and auditors
  • Credit lines with relationship banks are freed up for alternative investments

 

Who can use it?

Medium-sized companies looking to grow their business with high-volume Suppliers and achieve working capital benefits.

Frequently asked questions

Who finances GSCF programs?

GSCF is a funder-neutral platform, thus it can effectively service programs financed by any third-party liquidity provider or self-funded by the sponsoring company. GSCF works with numerous funding partners that have already approved GSCF as vendor of services, these mainly being large global banks. Additionally, GSCF Group has its own financing vehicle (Alternative Distribution Financing or ADF ) with access to liquidity sources from an ample investor-base.

Are there any countries which GSCF does not cover?

GSCF can service programs in any country. The key requirement is that program participants (obligors) are credit-assessable.

Are there any industries which GSCF will not consider?

GSCF will consider supporting companies in any industry with trading dynamics that are suitable for Supply Chain Finance (SCF) solutions; i.e. there are established relationships between Buyer-Seller, trading terms are short-term, open-account environment, etc. and as long as the volume flows between Buyer and Seller are sufficient and revolving.

What currencies can GSCF support?

GSCF can service programs in any currency as well as multi-currency programs. Our solutions integrate up-to-date exchange rates sourced by reputable market data providers, enabling virtually any combination of currencies to be supported. In addition our platform offers the inclusion of FX features such as forward rates and spot rates.

How much will a program cost?

SCF programs are designed to be more competitive than short-term bank financing due to the lower level of credit risk taken by the financing party (Funder).

Program cost will be determined by:

  • The term of financing required
  • The level of credit risk involved for the Funder
  • Possible use of credit insurance on the obligor(s)
  • Level of processing complexity involved i.e. multiple currencies/jurisdictions
  • Legal setup costs (depends on country)

 

What length of term can GSCF arrange financing for?

Typically, financing terms are between 30 and 90 days, but longer periods are considered for specific cases and industries.

What are the technical requirements for implementing a program?

At GSCF we keep our clients’ technical requirements to an absolute minimum. Our servicing and reporting capabilities are made available to clients via a web-accessible portal with no installation needed. Full integration with the originator’s system for the exchange of Accounts Receivable or Payable data is supported by a range of industry-standard data formats, any of which can be activated tailored to the originator’s requirements within a short timeframe.

Can companies customize the programs with their own branding?

Absolutely. The extent to which any of our solutions can be tailored to your branding requirements includes customization of the portal’s login screen, color schemes and placement of your company’s logo on the portal and reports. In addition, our program-dedicated Operations team will offer support services via a dedicated telephone line and email for your program, so that if a client requests support, it will seem no different from contacting your own company directly.

How does GSCF manage its security?

We ensure the security of our environment span via a combination of physical and technological means. Access controls restrict access to company or program-related documents, databases, buildings, etc. Access rights are managed by the respective team leaders and implemented by our IT Services team. In addition we routinely conduct Business Continuity Planning reviews and also undergo Ethical Hacking testing conducted by well-known third party service providers. Furthermore GSCF also undergoes an annual vulnerability assessment conducted by external auditors in order to be compliant with ISAE 3402 Type 2 regulations.

How does GSCF deal with complex and large size transactions that involve many stakeholders with different requirements?

GSCF specializes in large and complex SCF programs. GSCF’s credit-intelligent, fully automated and customizable technology is geared to handle the most challenging transactions involving numerous funders and insurance underwriters, multiple billing entities and a large number of obligors spread worldwide. Given our flexibility and vast structuring experience, GSCF can fulfil the requirements of each of these stakeholders simultaneously as well as efficiently handle large amounts of data.

What are the main aspects that differentiate GSCF from other service providers?

Technology: Over the years, GSCF has developed a proprietary state-of-the-art servicing platform which is constantly upgraded with innovative features being added to address users´ needs. Any program setup can be accommodated and its processing automated, resulting in highly-efficient and cost effective programs.
Expertise: With over 25 profitable years of experience and impeccable reputation amongst clients and partners, GSCF is the most successful SCF servicer, supporting the world’s largest blue-chip corporates and financial institutions. Our expertise in structuring highly-innovative, customized SCF programs is unmatched.
Flexibility: GSCF is an independent, Funder-neutral servicing company which enables us to offer clients access to the most competitive financing in the market on a continuous basis. Also, we cover the entire range of SCF programs (i.e. transactions based both on trade receivables and payables), which are fully tailored to the company´s specific requirements.