How Resilient Is Your Supply Chain Finance Program?
By , CFO, Prime Revenue • 7 minute read
How Resilient Is Your Supply Chain Finance Program?
Supply Chain Finance has always been sold on its working capital benefits, and that’s typically the reason a company launches a program in the first place. But after 20 years at PrimeRevenue — through the Great Recession, the pandemic, and the fastest rate-hiking cycle in a generation — I’ve never seen this much simultaneous uncertainty hit our customers at once. It’s convinced me of something else: launching for the working capital benefit is the easy part. Maintaining and growing that benefit over time requires resilience. So I’ll ask the question directly, because it’s the one I’d want a peer CFO to ask me: how resilient is your Supply Chain Finance program, really?
For the past two-plus years, the dominant theme across our customer base has been uncertainty — and that may understate it. We’ve watched a marked increase in M&A activity, strategic transactions, and shifts in credit profile ripple through the companies we work with. One consequence has been more turnover in corporate banking relationships, sometimes initiated by the corporate, sometimes by the bank. When that turnover happens inside a bank-led Supply Chain Finance program, the entire program is put at risk — not just repriced, but potentially shut down.
Over half of our customers have experienced at least one of these events in the past two years. That statistic alone is why I think the case for a truly independent, multi-funder SCF program is stronger today than it has ever been. Independence and multi-funder capacity aren’t separate features — they reinforce each other, and both matter more now than they did five years ago.
It’s worth being precise about what that independence actually means, because the difference isn’t cosmetic. Many banks will tell you they offer multi-bank funding through distribution or syndication. That’s true — for as long as the lead relationship holds. We’ve heard consistently from customers and prospects that when a credit dislocation hits, the lead SCF bank can exit the relationship with little notice, and the program built around it goes with it: forced to shut down or scramble to migrate. With an independent provider, that risk is structurally different. If a funder exits, only the funding source needs to change. The integration, the supplier experience, and the program itself stay intact.
This isn’t theoretical. A few representative examples from the past year — not a comprehensive list, just illustrative of the pattern — each hit a different version of the same risk:
| Scenario | Capital sourced | Program today |
|---|---|---|
| Multiple, rapid credit downgrades | $150M across 3 new non-bank funders | $1.5B+ annual volume / $500M AUM |
| Lead bank exited outright | Replaced the funding source | $75M annual volume / $20M AUM |
| Take-private transaction | $25M from a new bank | $100M annual volume / $20M AUM |
| Credit downgrade led to bank exit | $200M from non-bank funders | $1B annual volume / $100M AUM — larger than before the disruption, and growing quickly toward the full $200M sourced |
| Similar downgrade / bank-exit dynamic | $150M sourced quickly from non-bank funders | $250M annual volume / ~$200M AUM |
| Sole-bank SCF syndicate exited abruptly, no transition window | Added a new bank plus additional non-bank capacity | $500M annual volume / $100M AUM |
Source: Aggregated PrimeRevenue Program Data
That said, independence and a broad funder network aren’t a guarantee that every credit situation can be funded — some can’t, and any provider who tells you otherwise isn’t being honest with you. What a genuinely independent, multi-funder structure does guarantee is optionality: more paths to a solution, and a program that isn’t tied to the fate of a single funding relationship.
If you’ve assumed an SCF program isn’t available to you because of your size or credit profile, that assumption is worth revisiting. The normalization of funding sources beyond traditional banks has opened the market to participants who would have been locked out just a few years ago. And if you already operate a bank-led SCF program — even one you’re entirely satisfied with today — now is a reasonable time to ask what happens to that program if your lead bank relationship changes. Adding an independent, multi-funder provider alongside it is one way to make sure the answer isn’t “it shuts down”.
Whether you’re launching a Supply Chain Finance program or adding a second source of funding alongside a bank-led one, our team can show you what’s available for your company today. Contact us to set up a call.
