Payables finance or accounts payable financing is a method of international trade finance that allows businesses to access the funds they need to pay their bills. With payables finance, a lender provides short-term financing to a business based on the value of its outstanding invoices.
What is accounts payable financing?
Popular financing solutions like bank loans or working capital loans are expensive for suppliers in developing countries where credit is costly. This has given rise to payables finance or accounts payable financing as a financial product.
Who arranges payables finance?
Whilst Payables Finance is often arranged by large corporate buyers and their finance provider, it can also be applied to non-investment grade and medium-sized buyers. The parties to the financing are the seller and the finance provider.
