Supply chain finance with partial credit guarantee provided by a third-party or a supplier

This study examines the application of the business model of supply chain finance depending on the core enterprise, to the credit financing of transportation capacity enterprises. It studies the credit transmission characteristics regarding core enterprise credit radiation, presents the core enterprise credit segmentation and credit pricing, and transforms them into the calculation of credit guarantee and the default probability of core enterprises. Credit guarantee is regarded as a constraint of financial institutions’ credit decisions. Using probability density and logistic tools, we construct a profit maximization model for financial institutions and solve their optimal credit decision for a specific interest rate. Through numerical experiments, we verify the validity of the model and conclude that increasing the business volume between financing enterprises and core enterprises or reducing the probability of default can effectively improve financial institutions’ credit line.

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A Case Study on Supply Chain Finance of SF Express

Proceedings of Business and Economic Studies ◽

10.26689/pbes.v3i3.1303 ◽

2020 ◽

Vol 3 (3) ◽

Author(s):

Haoxiang Yang

Keyword(s):

Supply Chain ◽

Financial Services ◽

Management System ◽

Economic Value ◽

Information Management System ◽

Third Party ◽

Operating Efficiency ◽

Logistics Industry ◽

Operational Risks ◽

Supply Chain Finance

SF Express can carry out supply chain finance due to its perfect management system and advanced information management system. SF Express is outstanding from nearly 700,000 logistics companies in China and becomes a leading company with its complete management system and rich management experience. A good management system can greatly reduce the loss of internal management, avoid the loss caused by the failure of control, and improve the operating efficiency. Secondly, from an operational perspective, supply chain finance promotes great integration across business areas. While developing supply chain financial services to earn additional income, it strengthens the original customers’ preference, consolidates the main business, looks for stability and changes, and reduces the operational risks brought by the launch of new businesses. From the perspective of the whole supply chain, this business increases the overall economic value of the supply chain and relieves the financing difficulties. However, there are still imperfect mechanisms for controlling risk, limited funding, and insufficient innovation. The potential of the logistics industry and the increasing financing needs still demand us to stop. The development of third-party logistics and supply chain financial services led by SF Express has become inevitable.

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Supply Chain Finance and Financing Constraints on SMEs—An Empirical Analysis of Software Company

Journal of Economics and Public Finance ◽

10.22158/jepf.v6n2p1 ◽

2020 ◽

Vol 6 (2) ◽

pp. p1

Author(s):

Zhou Shihuai ◽

Tianjiao Hu ◽

Jun Chen ◽

Xi Zhou

Keyword(s):

Supply Chain ◽

Empirical Analysis ◽

Cash Flow ◽

Software Industry ◽

Third Party ◽

Third Party Logistics ◽

Flow Sensitivity ◽

Software Company ◽

Supply Chain Finance ◽

Cash Flow Sensitivity

With the perspective of small and medium-sized enterprises in China, it has trouble getting financing. Based on cash - cash flow sensitivity model, this paper figures out the existence of financial constraints on SMEs in software industry and supply chain finance’s effect on it. The cash flow sensitivity of cash and supply chain finance’s effectiveness are evaluated using a large sample of listed companies on the SME boardfrom2008 to 2018. Through empirical analysis and robustness checks, it is concluded that SMEs in software industry have financing difficulties and supply chain finance can alleviate this financial dilemma to some extent. Furthermore, the essay analyzes risk points of three different forms of supply chain finance and puts forward some suggestions about risk management for small and medium-sized enterprises, bank and third-party logistics.

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