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Transaction Mercantile offers supplier financing solutions involving no additional cost to large Buyers in a supply chain and no change to existing business processes. This means substantial additional liquidity without any additional borrowings for companies at no cost to them, reducing reliance on extending trade/supplier credits in order to optimise working capital efficiency.
To deliver this we use a method we term "Inverted Factoring" and the system that enables it is Xaction Mercantile Financial Logistics (XMFL)
- a secure accelerated settlement system
- a rapid deployment process
- and the funding
Essentially we take the debts due from a Buyer in a supply chain to a pool of Suppliers and we credit enhance and securitise these underlying transactions. We use a combination of financial and administrative techniques including guarantees, warranties and sophisticated re-insurance derivatives. Combining proven techniques from other areas of finance to this particular arena of supplier finance enables Transaction Mercantile to create the equivalent of a new asset class - enhanced receivables. This new asset class satisfies the lending criteria of selected credit institutions who provide the liquidity used to make immediate settlements.
Our approach is designed to aggregate a portfolio of trade transactions and present them in a novel way in order to eliminate, mitigate and manage the 4 principal risks which have always frustrated lenders in this sector:
- Financial Default
- Trade Dispute
- Contract Default
- Fraud
Xaction Mercantile Financial Logistics complements the innovation, creativity and efficiencies increasingly applied to all other non-financial areas of logistics management.
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