There are several types of SCF solutions that entrepreneurs can consider:
- Factoring: The supplier sells their accounts receivable to a financier at a discount, receiving immediate cash. - Reverse Factoring: The buyer initiates the financing, and the financier pays the supplier early, with the buyer repaying the financier later. - Dynamic Discounting: The buyer offers the supplier early payment at a discounted rate, funded directly from the buyer’s own cash reserves. - Inventory Financing: The financier provides a loan secured against the entrepreneur’s inventory, allowing them to purchase more stock without immediate cash outlay.