Payables Finance is provided through a buyer-led programme within which sellers in the buyer’s supply chain are able to access finance by means of Receivables Purchase. The technique provides a seller of goods or services with the option of receiving the discounted value of receivables (represented by outstanding invoices) prior to their actual due date and typically at a financing cost aligned with the credit risk of the buyer. The payable continues to be due by the buyer until its due date.
[Please note that this SCF technique is subject to a number of naming conventions, as is clear from the number of synonyms recorded. The Forum decided that the term Payables Finance is a generic and neutral expression that captures the essence of the technique].