One of the most important decisions a company will make when selecting a supply chain finance partner is whether to choose a bank-led program or one that leverages multiple funders. It’s a choice that has significant bearing on program success, coverage, financial risk and – most importantly – the ability for companies to meet the larger business objective(s) at stake.
Navigating the current supply chain finance provider landscape isn’t easy. It includes a mix of financial institutions, fintech vendors (legacy and new entrants), supply chain/logistics companies and more – all of which bring a unique perspective to supply chain finance. As a result, it’s become difficult to pinpoint how some providers fund their supply chain finance offerings and whether their approach falls into the category of bank-led or multi-funder.
This white paper aims to cut through this confusion and answer the following questions:
- What are the differences between a multi-funder and a bank-led approach to supply chain finance?
- What are the advantages and disadvantages of each?
- What are some common misperceptions about both?
- What questions should you ask to validate funding arrangements of a potential supply chain finance provider?