Leveraging great potential in the supply chain with finetrading

German banks are picking up on supply chain financing. But the upcoming stricter guidelines in the wake of Basel III will make it more difficult for financial institutions to do business from 2014. Bank-supported financing is becoming increasingly difficult and tends to be more expensive, especially for the manufacturing industry and trade. Presumably, loan maturities will become shorter, and ratings will become more important. Companies are therefore well positioned with a financing mix that also makes use of flexible alternatives. In this way, they can secure liquidity quickly and flexibly, are more independent of the credit market and even strengthen their rating and negotiating position in upcoming bank negotiations. Finetrading is one such financing alternative.

A few weeks ago, the U.S. carmaker Ford published a press release that attracted little attention in Europe, but which certainly contains explosive content for the supplier and financial sectors. The plan: In the near future, the global automaker wants to get by with fewer suppliers in the value chain, but collaborate more intensively with them and exchange ideas more frequently. Ford is sorting out, a magazine headlined. In the future, the core supplier group will consist of only 750 companies, which will then be allowed to process 70 percent of Ford's orders.

The North Americans want technology partnerships, the official word is. But behind this is surely also the Board of Management's effort to minimize costs in its global supply chain and build cars more cheaply through economies of scale in order to win back lost market share in Europe, for example, and increase profit per car sold. The managers' approach is the right one, because after all, financial analysts estimate that triple-digit billions of euros are lying dormant in the value chains of the world's largest companies - unused money that could be put to good use with finetrading, among other things.

Bankers sit in the front row at purchasing conventions

No wonder, then, that major German banks have now also discovered supply chain financing for themselves and are intensively courting customers in purchasing, logistics and supply chain management. Finetrading is also no longer a foreign concept for many financial institutions. In the past, the instrument was still a red rag to some, as finetrading stands in contrast to classic forms of financing.