30% APR? Yes please.

As a CFO or Corporate Treasurer, if you were offered 30% APR, risk-free, would you be able to find some free cash?

A growing number of our clients are finding that an Early Payment Discount Programme provides a fantastic return on investment, with no significant implementation hurdles, no risks, and valuable side benefits too.

A client who spends on average €100,000 monthly with suppliers, allocates a pool of €80,000 to fund early payment of 30-day invoices. Given the issues faced by businesses at present in accessing credit of any form, that client can be pretty confident of a high rate of capital utilisation in their early payment pool. Market intelligence shows that suppliers will offer discounts of up to 2.5% of invoice value to be paid 30 days early. On an €80,000 pool, that’s €2,000 per month, twelve times a year – or a return of €24,000 annually on an investment of €80,000.

That’s good money. But in addition, the client rests easy, knowing that they have provided a valuable, optional line of working capital to their suppliers that wouldn’t otherwise have been available, at a better-than-market rate. This creates stability and predictability in the supply chain, and reduces the market’s dependency on bank-based sources of working capital.