Supply Chain Financing

Yes, reverse factoring is the same as supply chain financing.

The buyer is keen to postpone payment for as long as possible, but the seller wants payment as quickly as possible.

Supply chain financing is especially beneficial when the buyer has a better credit rating than the seller and thereby has access to capital at a lower cost.

The buyer can use this advantage to negotiate better terms, such as extending the payment deadline. They can thus maintain cash holdings or use the money for other purposes, for example repayments of interest-bearing debt.

The advantage for sellers is access to cheaper capital and the possibility of selling their receivables and getting settlement straight away.