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Supply Chain Finance

Trade Finance

Financial solutions allowing buyers to extend payment terms while suppliers receive early payment using the buyer's credit rating.

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Supply chain finance is an umbrella for arrangements that fund the working capital sitting between a buyer and its suppliers — most often a buyer-arranged programme letting suppliers be paid early by a financier, with the buyer paying that financier at or after the original due date. Nobody owns the term, and programmes marketed under it differ substantially. One point deserves flagging before signing: how these obligations should be classified in the buyer’s accounts — as ordinary trade payables or as borrowing — has been genuinely contested, with disclosure becoming a live issue after failures where large balances were not visible as debt. Terms that extend payment dates, involve the buyer confirming invoices, or shift the economics of the payable are the ones that attract that scrutiny.
Why this entry carries no source list. This lexicon cites an official primary source wherever one exists and says so plainly where none does. This term is market convention: it was coined by commercial practice, it is used by everyone in the trade, and no body defines it. Pointing at a carrier’s tariff, a bank’s product page or a trade association’s explainer would dress one participant’s usage as a general rule. The practical upshot runs through the paragraph above — where the word carries no fixed meaning, the contract has to supply one.

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From the AJG lexicon archive (July 2026).

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