What is supply chain finance?
Supply chain finance (SCF), also called supplier finance, is a set of ways to pay suppliers earlier, or to fund a trade, using an approved invoice or a confirmed order as the basis. In its most common form, reverse factoring, a funder pays the supplier early and the buyer pays the funder on the original due date.
How does supply chain finance work?
- A buyer orders goods and the supplier delivers.
- The buyer approves the invoice, which confirms the amount and the date it will be paid.
- A funder pays the supplier early, minus a financing charge.
- On the due date, the buyer pays the funder the full invoice amount.
The supplier’s cost is usually based on the buyer’s credit standing rather than its own, which is why it can be cheaper than the supplier borrowing alone.
What are the main types?
| Type | Who starts it | Whose money | Best for |
|---|---|---|---|
| Reverse factoring | Buyer | A funder | Keeping your terms while suppliers get paid early |
| Dynamic discounting | Buyer | The buyer’s own cash | Earning a return on spare cash |
| Invoice factoring | Seller | A funder | Turning your own invoices into working capital |
| PO financing | Seller | A funder | Paying for production before there is an invoice |
Who benefits?
- Suppliers get cash sooner and can plan production around it.
- Buyers keep their payment date and protect suppliers they depend on.
- Funders lend against an invoice that a buyer has already approved.
What should finance teams watch?
Disclosure is the main one. The IASB amended IAS 7 and IFRS 7 to require disclosure of supplier finance arrangements for annual periods beginning on or after 1 January 2024, and the FASB issued similar requirements in ASU 2022-04. Have your auditors review the structure, and check how it affects your liquidity if a programme were withdrawn.
Why does it matter in the Middle East and North Africa?
The IFC estimates the global trade finance gap at about $2.5 trillion, with emerging markets most affected, and has raised its Global Supply Chain Finance Program from $1 billion to $3 billion. The region is moving too. Saudi Arabia’s Public Investment Fund launched Tawrid in 2026 to offer supply chain financing products, and Egypt has had digital supply chain factoring since 2021.
Different markets use different words. In the Gulf you will often see “supply chain financing” and “تمويل سلاسل الإمداد”, and in Egypt “supply chain factoring” and “تخصيم سلسلة التوريد”. Where Sharia compliance matters, ask each funder how the structure is built.
How does Strike SCF handle it?
Strike SCF puts supply chain finance on the same record as the order, so the approved invoice, the delivery and the funder’s offer sit together. Funders provide the money, and Strike is the software the transaction runs on. Start with Reverse Factoring, or see how the types compare.
Bring your next requisition.
We will run it through Strike with you, live, and reply within one business day.