# Supply Chain Finance

*Last updated: 2026-06-26*

> Supply Chain Finance (SCF) is a set of financing solutions designed to optimise cash flows between buyers, suppliers, and banks, separate from the physical movement of goods.

Supply Chain Finance (SCF) is a set of financing solutions designed to optimise cash flows between buyers, suppliers, and banks, separate from the physical movement of goods. Under the reverse factoring model—the most common variant—a buyer approves a supplier invoice on a trade platform, a bank pays the supplier early at a discounted rate, and the buyer settles the full amount on the original due date. This arrangement is particularly valuable for SME suppliers, who gain access to liquidity at the buyer's more favourable credit terms. In international trade, SCF frequently complements documentary instruments such as letters of credit. It should not be confused with conventional factoring, where the supplier independently sells its receivables to a third party.

**Source:** [https://www.investopedia.com/terms/s/supply-chain-finance.asp](https://www.investopedia.com/terms/s/supply-chain-finance.asp)

## Quick Facts

| Property | Value |
|---|---|
| Term | Supply Chain Finance |
| Language | EN |
| Word count | 118 |
| Last updated | 2026-06-26 |
| Source | https://www.investopedia.com/terms/s/supply-chain-finance.asp |

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