Supplier Guarantees

A structured discussion around the business need.

Supplier credit is fundamental to a healthy cash flow. This is especially true when sales are increased at an unprecedented rate. Shaffer Capital can facilitate financial backing to assure that suppliers continue supporting you while you grow. Supplier guarantees sit alongside the operating line rather than replacing it: the line funds the business day to day, while the guarantee is what keeps a key supplier comfortable extending terms through a period of growth.

Supplier credit is the cheapest working capital most businesses have, and the first thing to tighten when growth accelerates. A supplier who is unsure about payment shortens terms exactly when the business can least afford it. Financial backing keeps those relationships steady while volumes climb.

Backing a supplier relationship also changes what can be negotiated. On one distribution file, the certainty of prompt payment was worth a 2% discount from suppliers — a saving that came straight off cost of goods, on every order, for as long as the arrangement held.

Public financing options

Terms and availability depend on the business, transaction, and lender. Publicly described considerations in this area include:

The conversation usually begins with the supplier relationship itself: the terms today, what a longer term would be worth, and how quickly volumes are expected to climb.