The TradeCard Early Payment Program - An Innovation in Working Capital and Risk Management
"When you grow as fast as we do, the one thing you need most is capital and we found it was a challenge until we started using TradeCard's Early Payment Program. With one of our major US customers we now benefit from five-day payment terms making the cash available that we need to support our growth."
- Sanem Dikmen, Managing Partner, European T-Shirt Factory
As a supplier you need to grow your business while managing your customer's credit risk. How do you know whether to accept new orders when payments are still outstanding? At the same time, risk management has become an even greater challenge as buyers move away from Letters of Credit to Open Account to free up their credit lines and extend their payment terms to generate more free cash flow for themselves. Sound familiar?
TradeCard's Early Payment Program provides the benefit of non-recourse financing. The program provides fast invoice payment by electronic funds transfer and gives you access to a new source of working capital. In return, suppliers pay a modest invoice discount that is agreed upon between you and TradeCard's financial institution partner.
Check the list below to see how the program can help you manage your working capital:
| Optimize your working capital |
| Benefits of TradeCard |
Free up your credit line and eliminate loans to finance your customer's receivables |
| Metric of measurement | Cash available for strategic investments |
| Example |
Eliminate working cash buffers without risking embarrassing negative cash balances |
| Benefits of TradeCard |
Cheaper financing by benefiting from your customer's good credit rating |
| Metric of measurement |
Borrowing rate from your credit provider |
| Example | Enjoy lower cost of funds |
| Benefits of TradeCard |
Cut DSO / gain new source of cash flow - without relying on your customer's process to settle accounts |
| Metric of measurement |
Number of Days Sales Outstanding |
| Example |
Payment as early as 2 days after invoice submitted versus 30, 45 or more days according to agreed payment terms |
| Benefits of TradeCard |
Increase free cash flow for your business |
| Metric of measurement |
Free cash flow/credit line availability |
| Example |
Cash and non-recourse funding |
 |
| Improve your customer service |
| Benefits of TradeCard | Reduce cost of goods while maintaining your own margins through lower cost of financing |
| Metric of measurement | Cost of financing in $ |
| Example | Reduced by 0.5% |
| Benefits of TradeCard |
Gain greater working capital flexibility to grow with your customer |
| Metric of measurement |
Successful fulfillment of more frequent and larger orders |
| Example |
New source of cash |
| Benefits of TradeCard |
Eliminate paperwork and streamline processes contributing to faster order turnaround |
| Metric of measurement |
Number of staff needed in A/R/ Time for processing payment documents |
| Example |
50% reduction in staff needed for A/R |
| |
| Improve your risk management |
| Benefits of TradeCard |
Reduce risk of non-payment through non-recourse early payment |
| Metric of measurement | Credit losses in $ |
| Example |
Reduce credit losses from 3% to 1.5% of sales |
| Benefits of TradeCard |
Reduce your FOREX risk by knowing date funds are credited |
| Metric of measurement |
Reduction in total value of FX contracts |
| Example | Decrease risk of currency devaluation affecting you by 2% |
| Benefits of TradeCard |
Increase your sales while mitigating risk |
| Metric of measurement |
Availability of customer lines |
| Example |
Ability to accept larger orders |
Disclaimer: The benefits listed in the Tables above are meant to illustrate the possible benefits of TradeCard. They do not represent a guarantee of performance and may not apply to your business. See a TradeCard representative to discuss the specifics of the benefits TradeCard could
have on your business.
For more details on how the TradeCard Early Payment Program provides access to working capital on demand, read the fact sheet below:
Early Payment Program Supplier fact sheet - Click here.
To sign-up for the program or obtain more information, please email epp@tradecard.com.
