The SCF process typically involves three parties: the buyer (entrepreneur), the supplier, and the financier. Here’s a basic outline of how it works:
1. Agreement: The buyer and supplier agree on extended payment terms. 2. Invoice Approval: The supplier delivers goods/services and sends an invoice to the buyer. 3. Financing Offer: The buyer’s financier offers the supplier early payment, often at a discount. 4. Early Payment: If the supplier accepts, they receive early payment from the financier. 5. Repayment: The buyer pays the financier on the extended due date.