Simplifying Channel Financing: The Impact of FinTech Innovation

Businesses today are looking to capture time-sensitive opportunities with smarter channel financing solutions. 

This comes at a time when: 

• There is approximately $707 billion of trapped liquidity in working capital.

• 57% of businesses reported that they lost a large chunk of their revenue to supply chain disruptions, resulting in about a 62% loss in finances. 

Channel financing programs can offer businesses the stability they need—by providing a range of financial solutions that help them manage their working capital more effectively and, in turn, improve the flow of funds between suppliers, distributors, and other players in the supply chain.

In this post, we are taking a look at how FinTechs are simplifying channel financing by giving it a much-needed digital makeover. 

Channel financing: How things add up today 

At a time when the demand for trade financing is on the rise—opting for channel financing will help businesses access flexible credit terms and on-time financing solutions to smooth out financial pressures. 

Channel financing involves multiple stakeholders—suppliers, distributors, and retailers—making it inherently complex. 

Consequently, a slew of challenges follow, such as:

• Traditional channel financing systems are fragmented, often involving multiple, disconnected platforms—causing delays in approvals and disbursements 

• A lot of paperwork and manual verification is involved 

• Delays in payments from buyers can trap liquidity, negatively impacting working capital 

• Most conventional financing solutions can be expensive and inaccessible to smaller, lower-tier suppliers—limiting their ability to scale 

The need of the hour is to transition supply chain networks towards digital trade financing and tech-enabled FinTech capabilities that will increase the movement of working capital across sectors. 

Enter FinTechs: Sharpening digital capabilities to transform channel financing

We are on the cusp of opportunities to reinvent how channel financing is delivered to commercial clients. 

In the last few years, we’ve seen how FinTechs have been honing their digital edge to transform the trade finance sector.

FinTechs are now strengthening their position in the market with integrated channel financing solutions that provide large corporates and their ecosystem of suppliers and distributors with best-in-class financing solutions. 

Backed by cutting-edge technologies and agile operating systems, FinTechs are rolling out solutions to tackle channel financing challenges at scale. 

What FinTechs bring to the table are: 

• Automated workflows: FinTechs automate manual processes, speeding up approvals and disbursements—and allowing funds to flow faster in the supply chain. 

• Cost-effective solutions: They offer more affordable financing options that cater to the needs of smaller businesses, reducing dependency on traditional collateral-heavy loans. 

• On-demand financing models: Their flexible payment terms and financing models let suppliers choose when to receive payments, easing cash flow management. 

• Unified digital platforms: Using all-in-one platforms, FinTechs are centralising all stakeholders—suppliers, distributors, and financial institutions—onto one system, enhancing communication and reducing bottlenecks. 

• Real-time data integration: FinTech platforms integrate—real-time data, allowing for faster decision-making and early warning signals for payment defaults and better tracking of receivables. 

• Alternative credit models: Micro, Small, and Medium Enterprises (MSMEs) can access alternative financing options like invoice discounting—where financing is based on receivables rather than traditional credit assessments. 

Scale faster with digitised channel financing

FinTechs are advancing their digital prowess by automating manual processes, speeding up credit approvals and disbursements, and allowing funds to flow faster in the supply chain. 

Securing financing and managing receivables is seamless and simplified with CredAble’s unified working capital financing platform. 

While you can unlock financing at flexible terms, you can also enjoy a single point of access and receive all your collections in a designated collection account. 

Think Working Capital… Think CredAble!