As a bank or lender, you likely have clients that are purchasing goods from vendors that offer early payment discounts. If you don’t know if this is the case, now represents a great opportunity to initiate the conversation with your clients. If you do know that this is the case and your client is not taking advantage of those discount offerings – you are leaving money on the table. Let’s take a look at a recent Artis client experience to showcase the scenario.
One of our factoring clients was approached by a potential client/buyer that was looking for help. This buyer was a local retailer and was in search of inventory financing options to help them “stock up” on inventory to take advantage of seasonal traffic. The retailer sells high-end goods procured from large suppliers, and these suppliers offer sizeable early payment discounts, from 10-20%. The lender, being an Artis client, quickly realized this scenario as an excellent opportunity to use SCF to earn revenue via large early payment discounting.
The suppliers that this retailer is dealing with are very large and not at all interested in participating in an SCF program.
ArtisPay® “Auto QuickPay”. With ArtisPay, your clients can take advantage of early payment discount offerings without ever engaging the supplier.
The factor set payment terms that matched the expected cash conversion timeline for the inventory and paid the suppliers early on behalf of the retailer. The supplier was not privy to ArtisPay’s existence and was, nonetheless, thrilled to receive payment early from the retailer. The large early payment discount enabled the factor to revenue share with the retailer while still earning a return above their target IRR.
With ArtisPay, your clients can take advantage of early payment discount offerings without ever engaging the supplier. Think of all of your clients and potential clients that are leaving money on the table by not taking advantage of the early payment discounts their suppliers are offering. With an Artis SCF program, you can pay early on behalf of your clients, and if you so inclined, share part of the discount with them. Suppliers offering early payment discounts provide an extremely easy way for banks and lenders to add incremental revenue to an existent client base.
A founder of Artis Trade Systems, Jamie Clemons, CPA, started his career working in business risk consulting at Protiviti after attending the University of Arizona on an academic scholarship where he graduated Summa Cum Laude with dual degrees in Finance and Accounting. During his time in consulting, Jamie served clients in various industries including Airline, Banking, Software, Pharmaceutical, and Education among others.