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4 Trends in Supply Chain Finance

As the practice continues to grow, some companies are self-funding, and others are using it for payables or with distributors.

By Susan Kelly | Updated on September 14, 2016
Supply chain finance got a big boost in the wake of the financial crisis, as companies worried about their suppliers’ stability saw extending financing as a way to help them. But even as the markets and the economy have slowly mended, companies’ use of supply chain finance has continued to grow.

Paul Johnson, senior product manager of global trade and supply chain solutions at Bank of America Merrill Lynch, said that while the bank has been offering a supply chain finance solution for about 15 years, “it was really the financial crisis in 2008 to 2009 that started to drive adoption.” Big buyers served as “triage units” during the crisis, he said, by providing support for suppliers that were experiencing a liquidity squeeze.

“There was a sharp uptake in that 2008-09 time frame, and we’ve seen nothing but growth since,” Johnson said.

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