Overcoming the challenges of a changing world: Orbian’s Supply Chain Finance

Global Finance Magazine, October 2022

Since the financial crash of 2008, the changing economic environment has presented companies in all sectors with problems to overcome. Brexit, the Covid pandemic and war in Ukraine have exacerbated these problems. In such times, liquidity is vital. Orbian’s Supply Chain Finance solutions go far beyond those available elsewhere in the market and address the most pressing needs of corporations around the world.

The areas of transition

In a world fraught by challenges, three great transitions are emerging for global supply chains.

  1. Energy Transition. Such pressure pre-dated Russia’s weaponization of gas supplies and came from environmentalists lobbying and increasing investor demands. Not only must companies address their own practices, they must also ensure suppliers meet environmental concerns. Recent proposals from the Biden administration to embed such multi-tiered reporting into companies’ SEC filings may yet prove a decisive moment in real corporate action.
  2. Geo-Political Transition. Growing US-Sino tensions and war in Ukraine are only the most obvious signs of a rapidly changing international order. Globalisation is reversing and new investment is required in re (“friend”)-shoring initiatives.
  3. Macro-Economic Transition. The world of low inflation, zero interest rates and ultra-low cost capital has come to a shuddering halt. Adjusting to an altogether less benign economic environment poses enormous challenges across supply chains.

The role of Supply Chain Finance

The basic mechanisms by which Supply Chain Finance can assist buyers and suppliers address the various business, and investment challenges of these transitions are well rehearsed.

By providing assured liquidity, companies throughout supply chains have the greatest confidence and ability to invest. With their receipt of accelerated payment for goods and services, suppliers have the liquidity and stability to invest in their people, plant and procedures. Such investments can then start to feed a virtuous cycle to address each of the transition challenges including energy challenges, disrupted international relations and rising inflation.

By itself, however, such “standard” SCF goes nowhere near far enough to help suppliers meet the new transition challenges. Instead, global supply chains need advanced SCF.

Orbian’s Advanced SCF

Orbian has been a market leader in supply chain finance for more than 20 years. The experience, networks and datasets that we have developed over this period provide us with a set of tools that offer unrivalled capabilities for companies seeking to address today’s heightened challenges.

Orbian’s universal funding structure offers solutions to corporations around the world, guaranteeing much-need funding while reducing risk of single-source liquidity at every point in the SCF arrangements.

Orbian’s fixed-rate offer gives suppliers a way to manage interest rate risk and invest with confidence. Suppliers that took advantage of Orbian’s fixed-rate offerings in 2021 have, on average, enjoyed funding costs in 2022 300 basis points below those paid by suppliers exposed to recent, sharp increases in market interest rates.

Orbian’s e-card allows us to deploy supply chain finance quickly to suppliers of any size in almost every country around the globe, giving them early cash payment within five days of having an invoice approved.

The stability and liquidity these products provide are vital in our ever-changing environment. By giving companies the support they need, we allow them to invest in their future and meet the challenges of a world in transition.

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