Prepayment financing

Prepayment financing is a solution to the financing difficulties faced by small and medium-sized enterprises in the supply chain. In the supply chain, downstream enterprises often need to prepay accounts to core enterprises, forming a model of payment before delivery. The prepayment financing model allows downstream enterprises to pay these prepayments through financing, thereby ensuring the smooth progress of business.

The advantages of prepayment financing

Improving the efficiency of fund operation: Downstream enterprises can extend the payment deadline for procurement through prepayment financing, help core enterprises meet production capital needs, and improve production efficiency and operational efficiency.

Enhance business scale: Advance payment financing enables buyers to obtain more goods with less funds, achieve leveraged procurement, and suppliers can conduct bulk sales to improve sales scale and efficiency.

Stable profitability of financial institutions: Financial institutions sign repurchase agreements with core enterprises to reduce bad debt rates and bring stable returns to investors.

Structure of prepayment financing products

The product architecture includes modules such as customer management, data center, financial product management, pre loan management, in loan management, post loan management, risk management, profit sharing management, and capital collaboration. These modules need to be integrated with the customer's business system, bank, third-party credit reporting, and internal related systems.

Introduction to Key Modules

Data center: Collect transaction data, reduce the risk of false transactions, display transaction processes, and reduce concerns of fund holders.

Financial product management: Provide a product list, allowing enterprises to independently choose pre credit funding sources and improve the efficiency of fund utilization.

Profit sharing management: Accounting for the profits of the funding party and core enterprises, providing reports for reconciliation.

Collaboration between funding parties: Dealing with online system issues of non bank institutional funding parties, downloading data for review and disbursement.

Prepayment financing business process

Pre credit process: Financial institutions provide overall credit limits to core enterprises, while downstream enterprises obtain separate limits to improve financing efficiency.

Credit process: The enterprise selects financing payment methods, the supply chain finance system conducts information verification and risk control preliminary screening, and the bank completes risk control review and disbursement.

Repayment process: After the enterprise repays, the supply chain finance system calculates the repayment principal and interest. After the bank successfully deducts the payment, the financial system is notified, and the business system generates a release notice.

The prepayment financing model reduces the overall credit difficulty of the supply chain through data credit utility, effectively solves the financing problem of small and medium-sized enterprises, helps core enterprises expand their business scale, expands bank financing categories, and enhances bank profitability. Banks will shift credit from individual enterprises to the entire supply chain, which will contribute to the development and reuse of industrial clusters