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Finance & Payments

Supply Chain Finance (SCF)

Also known as: SCF, Reverse factoring

Supply chain finance (SCF) is a set of financing arrangements that let suppliers get paid early while buyers keep or extend their payment terms.

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In a typical SCF, or reverse factoring, programme, once a buyer approves an invoice a financier pays the supplier early at a small discount, and the buyer later repays the financier on the original due date. Because the financing is based on the buyer's stronger credit, the supplier accesses cheaper funding than it could alone.

SCF aligns the interests of both sides: the supplier improves cash flow and reduces the strain of long payment terms, while the buyer preserves working capital without forcing suppliers into distress. It is increasingly used to strengthen supplier resilience across B2B supply chains in Malaysia.

Frequently asked questions

What is supply chain finance?
Supply chain finance is a set of arrangements — often reverse factoring — where a financier pays suppliers early against approved invoices while the buyer pays later on the original terms.
How does supply chain finance help suppliers?
Suppliers get paid early at a small discount using the buyer's stronger credit, improving cash flow and easing the burden of long payment terms.

Go deeper

B2B trade financing

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