Supplier Financing System

What is the Supplier Financing System?

A murabaha-based (spot purchase, deferred sale) cash-financing product that lets suppliers — who regularly provide goods and services to firms buying from many sellers/suppliers — collect their sales receivables before or on maturity, on a guaranteed basis. It helps suppliers plan their production and cash flow and helps buyer firms manage their costs over time.

Features of the Emlak Katılım Supplier Financing System

1. Financing the Invoice Amount Before Maturity

The buyer firm sends its order to the supplier firm.
The supplier firm reports the order and its chosen payment maturity to Emlak Katılım.
Price and commission are conveyed to the supplier. If the supplier accepts Emlak Katılım’s price offer, it ships the goods to the buyer and the buyer sends its invoice to Emlak Katılım.
The supplier initiates payment of the invoice it wants paid on its chosen maturity via our Internet Branch.
Financing is automatically extended to the buyer within the defined Supplier Financing limit and the invoice amount is paid to the supplier.
The profit share of the financing provided to the buyer is collected upfront from the supplier according to the invoice maturity.

2. Financing the Invoice Amount on Maturity (Guaranteeing the Invoice)

The seller or buyer firms upload invoices to our system up to the buyer’s available Supplier-Financing limit.
When the invoice matures, the amount is transferred from the buyer’s account to the seller by Havale.
If the buyer’s account has no balance, financing is extended to the buyer and the invoice amount is paid to the supplier.

3. Assignment of the Invoice Receivable to a Third Party

With the Receivable Assignment feature, suppliers can assign all or part of the invoice receivable to an individual or corporate third party who is our customer.
All or part of the receivable can be assigned.
When the invoice matures, if the buyer’s account has no balance, financing is extended to the buyer and the amount is paid to the assignee.
Receivable-assignment transactions can be done via our internet banking.

What Are the Benefits of the Supplier Financing System?

For the Supplier Firm:

Continues operations without disrupting cash flow.
Secures its collections.
Accesses financing on the buyer’s creditworthiness, without collateral and at a favourable profit rate.
Gains a competitive advantage in spot purchases with the receivable it collects early.
Achieves operational efficiency by collecting electronically.
Finds long-term working opportunities with strategic, high-volume customers.
Needs no additional movable/immovable collateral when using financing.
Can settle payments to its own suppliers without waiting for its receivables to mature, gaining a price advantage.

For the Buyer Firm:

Provides the ability to extend payment terms.
Reduces your purchasing costs.
Enables balance-sheet management.
Reduces the operational workload.
Enables long-term work with suppliers.
Enables negotiation with suppliers on payment and pricing.