Why are more companies relying on supply chain financing?

Adam Josephson - Senior Vertical Expert - FreightWaves - Baltimore, MD

https://www.freightwaves.com/news/corporate-disclosures-highlight-heavy-use-of-supply-chain-financing

U.S. corporate debt excludes a widely used tool called supply chain financing (SCF) that’s come to light thanks to a recent rule from the Financial Accounting Standards Board (FASB) effective in the first quarter of this year. The more familiar one becomes with SCF, the more it resembles debt; buyers are effectively borrowing from their suppliers on a short-term basis, pulling forward free cash flow in the process. As The Wall Street Journal recently wrote, SCF is “essentially a form of short-term borrowing to pay for goods and services from suppliers.”

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