A supplier assurance letter, written by Riviera Finance on your behalf, can convince your supplier to sell you the materials you need ON CREDIT. This transition credit can be a launching pad for your company’s success and continued growth. Let’s take a look at some of the risks a supplier faces when offering trade credit to a reseller.
Top 5 Risks a Supplier Faces When They Offer Trade Credit:
- The reseller’s customer will cancel or alter their purchase order
- The reseller won’t be able to deliver the product
- The reseller’s customer rejects the product
- The reseller’s customer can’t pay their bill
- The reseller won’t pay on time or just won’t pay
Invoice factoring combined with a supplier assurance letter by Riviera Finance will remove the reseller credit risks (4 and 5 above). If the supplier is confident in the product, which they should be, and the reseller’s purchase order is verified, the supplier assurance letter may enable the reseller to buy and resell product without any working capital required.
Using this formula, Riviera Finance reviews the credit and purchase order of your customer, sets a credit limit, and issues a supplier assurance letter to the supplier. This is a guarantee to pay the supplier a specific amount after the product is delivered to the customer and the invoice is factored.
After successful verification, Riviera Finance pays the supplier, then pays the reseller (you) the balance of the invoice less the factoring fee and any reserve, according to the terms of the factoring agreement.
Riviera Finance sends the factored invoice and backup to the customer for payment according to the original credit terms.
This process allows you to buy and sell product without any outlay of cash. Your supplier can substantially limit the transaction risk while building a growing trade relationship with you. All three businesses benefit in the process.
If you’re seeking invoice factoring, a supplier assurance letter or another type of assistance with business finances, contact Riviera Finance and find out how they can help you.