Hellmann link provides favourable funding terms

Strategic alliance brings big benefits HELLMANN WORLDWIDE Logistics has entered a strategic alliance with Global Supply Chain Finance (GSCF) and can now offer Accounts Receivable and Accounts Payable Financing based on alternative funding possibilities within the supply chain. The Zurich-based GSCF guarantees the buyer’s payment risk while handling the complete settlement process. Because of a sophisticated structure and the support of Hellmann’s Tracking and Tracing system, GSCF can offer favourable funding terms, based on London Inter-Bank Operator (LIBOR) rates, to existing and potential Hellmann customers. In Accounts Receivable Financing, GSCF purchases vendors’ accounts receivable immediately after dispatch of the goods and after obtaining Hellmann Worldwide Logistics track-and-trace confirmation. “This improves the vendor’s liquidity and fully mitigates the credit risk on any buyer’s insolvency,” says an HWL spokesman. “It also enables the vendor to extend sales volumes without increasing risk exposure.” By using GSCF funding capacities in the Accounts Payable Financing service, a buyer can take advantage of early-payment discounts as well as extended payment terms. Hellmann uses the example of a customer who is a large distributor of computer hardware on the African continent to illustrate the point. The buyer is offered a 3% early-payment discount if payment is effected within 15 days of shipment of merchandise, but cannot take advantage of the discount due to lack of liquidity. Here GSCF finances the goods purchased by the buyer, and can offer an extension of payment terms up to 90 days after shipment of the merchandise. The buyer benefits because he obtains a credit limit from GSCF without having to block existing bank facilities, and can take advantage of early payment discounts, extended payment terms and reductions in bank charges. “It means that GSCF is providing an alternative credit facility at highly competitive rates, and is in a position to rationalise the settlement process and stabilise cash flows,” he said. The entire process is totally electronically operated, with the only paper involved being that of the contract signed with Hellmann.