Marketplace where suppliers set rate for early payment
Supplier offers matched against buyer’s cost of capital and funds available
Buyers pay suppliers directly the same way, only earlier
Establishing the market place: Earlytrade is integrated with the Buyer's ERP, then all suppliers are invited to participate.
Joining the program: Suppliers wishing to access early payments simply register and verify themselves on the platform without needing to endure onerous KYC requirements. Suppliers do not have to register if they do not wish to.
Invoice approval: Invoices approved for payment in the Buyer’s ERP system are automatically uploaded to the early payment platform.
Buyer action: The Buyer determines the amount of surplus cash they are able to make available for early payment and the discount rate required for early payments to be accepted (based on their own marginal cost of funds). A portion of these funds are allocated for early payment to small business only.
Supplier discretion: Suppliers are able to view when their invoices will be paid and decide whether their business would benefit from early payment. If so, the supplier submits a request into the marketplace platform for early payment (prior to the contractually agreed payment term) by nominating a discount they are willing to accept on their invoices. All suppliers with invoices approved for payment are able to specify their individual discount rate. Suppliers always maintain complete discretion over whether they bid for early payment and the discount rates offered.
Marketplace clearing: Using a volume weighted average price (VWAP) bidding model, the marketplace matches eligible bids to the committed supply of working capital. This averages the discount rate across all approved invoices payable to an individual supplier. If the VWAP discount rate exceeds the minimum rate required by The Buyer, and the stated cash limit has not been exceeded, that particular supplier will be granted early payment. The competitiveness of discount rates within the marketplace is entirely determined by supply and demand dynamics, with no use of AI to target specific suppliers.
Small business allocation: To ensure large suppliers do not exhaust the entire supply of working capital, Earlytrade keeps an allocation of cash reserved only for small business suppliers. Small businesses are therefore guaranteed early payment until that allocation has been utilised, after which they can access the broader market. This model guarantees equitable treatment of small businesses as they always compete on a level playing field with other small businesses.
Payment rescheduled: The marketplace platform (Earlytrade) interacts with the Buyer’s ERP system to automatically confirm the discount amount and rescheduled payment date for successful suppliers.
Buyer cash utilised: Early payments are made on a daily basis from the Buyer’s corporate bank account directly to the suppliers’ bank accounts, with no third party financing required. This reduces the KYC and onboarding requirements for small businesses.
Key supplier benefits:
- Supplier driven marketplace
- Suppliers maintain complete discretion as to if and how they interact with the platform, including the discount rates offered
- VWAP bidding model enables early payment for tens-of-thousands more invoices
- Discount rates in the marketplace entirely determined by supply and demand dynamics, with no manipulation by AI
- Small business verification service
- Portion of marketplace funds specifically segmented for small business early payment
- No third party financing required
- No KYC requires for suppliers to endure
Earlytrade provided a detailed explanation of our marketplace model in our submission to the Australian Small Business & Family Enterprise Ombudsman's review into Supply Chain Finance. Download our full submission here
marketplace has created the best supplier
experience for meeting working capital demands
The digitisation of supply chains is well underway. Once only available to multinational corporations, companies of all sizes can now participate in the largest working capital marketplace in the Asia Pacific region.
Earlytrade has developed an entirely unique ecosystem that allows companies to draw working capital seamlessly from one another as well as tap into off-balance sheet funding using domestic and international banks without any of the traditional problems of classic supply chain finance.
tailored for Australian and NZ companies
‘off-the-shelf’ American competitors
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