Use Case 1 - Deep Tier Supply Chain Finance

Situation

A leading multinational CPG company wanted to reduce costs, improve working capital while building provenance for goods sourced.

The challenge was that in large complex supply chains it was difficult, expensive and time-consuming to bring financial efficiencies and track provenance. SMEs in the large corporate's deep tiered supply chain end up paying huge credit risk costs, financing costs, and processing costs and did not want to incur extra overhead for goods provenance.

Banks had challenges of getting credible information and carrying out manual processes based on segmented information. It was difficult to bring onboard a deep-tier supply chain for large corporations.

Solution

Transper demonstrated a win-win situation in deep supply chains of the large corporate by creating a deep-tier financing opportunity based on accepted invoices and credit risk of the large corporate. The process was intuitive and easy to implement:

  1. Large corporate offered rule-based Digital Payment Obligation (DPO) backed by a bank on Transper platform which is a promise to pay on the due date against accepted invoices to their Tier 1 suppliers.
  2. Tier 1 suppliers received this DPO for their accepted invoices and transferred the DPO to their vendors – Tier 2, against their payables towards Tier 2 vendors.
  3. Tier 2 supplier financed the DPO at a click of the button with the Bank backing the DPO and got money in their bank account.
  4. Large corporate paid the bank at the end of the credit term and got a discount.
  5. Large corporate had a view of the flow of DPO in the supply chain.

Benefits

We demonstrated annual benefits for every stakeholder with minimal efforts including 6% savings for the large corporate. The benefits for all stakeholders on the platform are listed below:

Large Corporate

  • Reduced costs due to discounts
  • Reduced risks of time delays
  • Enabled sustainable supply chains

Banks

  • Increased lending opportunity
  • Increased yield in lending portfolio
  • Reduced risks

Suppliers

  • Increased liquidity
  • Simplified funding process
  • Reduced cost of financing

Use Case 2 – Supply Chain Finance

Situation

A multi-billion-dollar firm had a management buy-out and wanted to get P&L cost benefits while ensuring early payments to their suppliers. They wanted to establish a conventional supplier financing programme.

Their challenges included the long time required to establish new financial rating and a high chance of getting less than preferred rating. Also, at lower rating, banks were not ready to finance the supplier finance programme. Securitization of their receivables was also expensive.

Solution

Transper demonstrated a win-win situation where the company offered supplier finance to its suppliers. Transper connected to the supplier financing programs set up by the company’s customers and used the liquidity to offer supplier financing to the suppliers. There was no need for any bank to finance this supplier finance program. The suppliers accepted early payment at the offered discount rates for extended credit periods. The process was intuitive and easy to implement:

  1. The company uploaded payable invoices on Transper platform.
  2. Transper automatically matched payable invoices with the receivables from the company’s customer’s supplier finance program.
  3. Company offered prepayment to its vendors for the matched payable invoices and company’s vendors requested prepayments on Transper.
  4. Transper fulfilled prepayment requests by connecting with the company’s customer’s supplier finance program.
  5. Transper reconciled the accounting and provided input to the Company’s ERP.

Benefits

Transper demonstrated a 6% APR savings for addressable third-party spend and increased credit periods conserving working capital. The benefits for all stakeholders on the platform are listed below:

Company

  • Reduced costs due to discounts
  • Increased working capital

Banks

  • Increased the yield of existing supplier finance program
  • Increased disbursements from an existing supplier finance program

Company’s Customer

  • Increased onboarding on Supplier finance program
  • Increased working capital

Company’s Vendors

  • Increased liquidity
  • Reduced processes and time
  • Reduced cost of financing

Use Case 3 – Project Financing

Situation

A multi-million dollar infrastructure project had been commissioned and the project owner wanted to ensure that the project was delivered on time without any cost or time overruns while ensuring quality.

The challenge was that in large complex project supply chains it is difficult, expensive and time-consuming to have visibility and influence beyond immediate suppliers. Funds disbursed for the project were not reaching the intended suppliers in the extended supply chain. This led to suppliers prioritizing other projects leading to delays in delivery and also impacted quality since things were being rushed very close to deadlines resulting in cost overruns.

Solution

Transper demonstrated the provenance of the flow of funds in the project supply chain. The flow of finance to the key component delivered is a credible measure to ensure the delivery of the project on time, cost and quality. The process was intuitive and easy to implement:

  1. The project owner offered rule-based Digital Payment Obligation (DPO) backed by a bank against accepted proforma invoices to their large contractors
  2. Large contractors received this DPO for their accepted proforma invoices and transferred the DPO to their sub-suppliers
  3. Sub-suppliers financed the DPO at a click of the button with a bank on the platform and got money in the bank account
  4. Project owner paid the bank at the end of the credit term and could see the flow of DPO in the supply chain

Benefits

Transper demonstrated tangible P&L benefits for every ecosystem player while de-risking the project and reducing cost and delays. The benefits for all stakeholders on the platform are listed below:

Project Owner SPV

  • Reduced costs
  • Reduced risk of time delays
  • Reduced misuse of money

Banks

  • Increased leading opportunity
  • Reduced delays of projects
  • Reduced credit risk

Prime / Sub Contractors

  • Increased liquidity
  • Improved cash position
  • Improved access to funding