Supply Chain Finance: learn all about this concept!
July 20, 2022
March 2022 | by Sky.One Solutions
The drawee risk consists of anticipating amounts to suppliers and has this name because the credit line used to carry out this operation is that of the drawee . That is, suppliers do not need to go through a credit analysis to request the advance.
In this way, companies with good reputations can help their suppliers obtain greater working capital by adopting drawn risk. And because it generates advantages for both sides, both the drawee and the supplier, this operation has become popular in the market.
In this article, we will clarify what the drawn risk is in practice, as well as address the main doubts on the subject. Keep reading until the end!
In practice, drawn risk – also known as anchor project – works like this: an anchor business provides a network for its suppliers where they can anticipate future sales values for their products or services .
For example, if the supplier closes a contract that has the forecast of payment by the company for 90 days from now, with the risk withdrawn, he can send the invoice through the relationship platform and receive the amount on the date of the order.
This exchange is done digitally and reduces the work of the anchor company's accounts payable team, increasing the team's productivity and business performance.
Generally, the anchor company already has a good relationship with the financial institutions to which it is connected. And the capital made available can come either from banks, FIDC (Credit Rights Investment Fund) or from the company itself – if it is available.
Suppliers just need to enter the platform and send their notes , then request the anticipation and wait for the credit offers that the investors present there will offer. Once the proposal is chosen, the capital is already made available to the supplier.
That is, the entire advance payment process takes place within a digital platform used by the anchor company . The supplier logs in and requests that the amount be paid in advance, sending the invoice that proves the transaction.
Once the product is delivered, the supplier can choose which of his sent invoices he wants to anticipate. Investors present on the platform then send the rates available for the operation and the supplier can choose the one that best fits.
Securities that are not advanced by the deadline for payment by the drawee automatically leave the advance system, and return to the conditions previously agreed with the company.
The advantages of drawn risk are many and vary if we are considering it from the perspective of the anchor company and its suppliers.
For example, if you are a small supplier and need capital, interest rates on loans and financing are high.
But, when using the reputation of a large company through advance payments, the fee to be paid is fixed . It is also not necessary to open a new bank account for the request, everything is done digitally through a platform.
This ensures that the supplying company does not become indebted, nor lose points from its Score due to the credit request. The withdrawn risk also offers exemption from the IOF fee and more money in cash in a shorter period.
In turn, for the anchor company , this process helps to extend the payment period to its suppliers . Furthermore, when the resource used is from the drawee itself, this is a way to monetize your capital .
Retail has had to reinvent itself in recent years and digital solutions, such as withdrawal risk platforms, have been relevant in this transition. Imagine a retailer that, due to the pandemic, lost a large part of its in-person sales.
This anchor company needs a chain of suppliers to function fully, but it cannot ask for more payment terms for products, as suppliers cannot run out of available capital.
By contracting a withdrawal risk platform, the retailer will be able to offer in its negotiations the possibility for its suppliers to advance the invoices that would take time to be paid.
Thus, the anchor company does not commit its capital in the midst of a downturn in the market and still ensures that its suppliers continue to operate their business. In addition to offering data security and digital practicality during the process.
The drawn risk emerged as a more advantageous credit option for small supplier companies that do business with large corporations. Using this operation, these suppliers access greater working capital in a simpler way.
Within the anticipation platform, investors offer more competitive interest rates, all digitally and quickly. In addition, the relationship history between the companies can be accessed, facilitating the verification of information in the future.
For the anchor company, this is a way to reduce the workload of its accounts payable department – which frequently receives requests for data from contracts with suppliers.
Furthermore, the available working capital can be used to replenish inventory, invest in improvements and other purposes consistent with the financial planning of each one. That is, there is no need to justify the reason for the anticipation of resources.
The withdrawn risk still has the great advantage of improving the company's relationship with its suppliers. Thus, it is easier to ask for longer payment terms in future commercial exchanges.
All companies are inserted in a chain of relationships, formed by customers and suppliers. Valuing the good relationship between both parties is very important, therefore, the drawn risk works as a vote of confidence between the two.
In addition to relationships, this type of maintenance can help the productivity of your company's finance department.
This content was produced by SkyOne's team of cloud and digital transformation experts.