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Hi sir, for supply chain funding, i came across this statement.
” The buyer with a good credit standing can present the sales invoice to a financial institution and request for a immediate remittance often at a discount”
Immediate remittance to who ? Is it to the seller ?
And who is receiving the discount ? Is it the buyer with the good credit rating ?
I don’t know where you read this, but it is a most extraordinary statement! 🙂
What they are trying to say is that if you buy goods (and therefore receive a sales invoice from the supplier), then you could borrow money from the bank and pay the invoice immediately (which might mean you get a discount from the supplier because of paying fast). Obviously the bank would charge interest, so it would only be sensible if the discount you get for early payment was less than the interest being charged.
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