Global SCM Financing Solutions.
A TLV Capital Company
Advanced Inventory financing solutions
The challenge - Leading industrial and trading companies face a crucial need to effectively manage their essential inventory to support their operations. This inventory encompasses raw materials, consumables, spare parts, and finished goods, all of which play a vital role in their business processes. These companies typically own the inventory and record it on their balance sheets as a valuable asset.
However, optimizing inventory and reducing costs pose continuous challenges for these organizations. They allocate both direct and indirect resources to handle inventory-related tasks. Unfortunately, a significant amount of funds becomes tied up in inventory, preventing them from being allocated to other potential sources that could yield better returns.
While dedicated inventory management companies exist to optimize inventory, they generally do not offer financing services or solutions.
Inventory financing remains a major challenge for these companies, as it requires careful management and allocation of their own funds. To address this issue, many organizations are exploring alternative solutions such as we have to offer, inventory financing and in some cases off-balance reporting. This approach involves not recording inventory on our client's books ( off balance ) & releasing funds tied with inventory , offering potential benefits such as healthier balance sheets, better yield on the released funds , improved KPI and financial ratios.
By adopting innovative inventory management and financing strategies, leading industrial and trading companies can strive for improved operational efficiency, cost reduction, and enhanced financial performance.
Our Solution
-
Leading clients require inventory levels from a few to tens of million of US Dollars.
-
A dedicated Inventory Finance Entity (IFE), is capable to hold, finance & own the inventory required to support the current and potential growth of the client.
-
The IFE entity shall finance & own the inventory as agreed between the parties ( parts, price, quantities, period, fees).
-
The IFE will be paid upon usage\consumption\sale of the item & immediately finance the replenished item to maintain the required inventory level – a real Just-In-Time service
-
The IFE can also provide inventory management services a full VMI service as needed.
Benefits For The Customer
-
Inventory financing – usually not a financed component.
-
Free cash flow tied in inventory – increase yield as these will be invested in other activities yielding a higher return compared to funds “chained” in inventory – results in higher profitability.
-
Reduce dead Inventory – as this is the core business, inventory levels are usually more accurate resulting in less dead inventory.
-
Improve financial and operational KPI by reducing inventory & financing.
-
Avoid/improve transfer pricing – cross-site processes are easier.
-
Gain Sharing - share cost saving with the client – (better pricing, tier pricing, economy of scales).
-
Fixed inventory pricing & valuation.
-
Reduce supply chain lead time risk – increase inventory levels without the burden of financing and management.
-
All in one solution – One agreement, One currency, One payment.
-
Reduce accounting and finance transactions and records.
-
Improve KPI and financial ratios (inventory turn).
-
Improve Quality system & score.
-
Additional services upon request – warehousing, purchasing , sourcing, optimization & inventory management.
_edited.jpg)
Sam Samson
CEO, Global SCM Financing Solutions Ltd