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In another announcement emblematic of the increasing focus on alternative finance by financial institutions, Wells Fargo Capital Finance is establishing a new originations team with its Supply Chain Finance Group. The release indicates that the acquisition of GE Capital’s Commercial Distribution Finance business has made Wells the largest channel finance provider in North America.
“The Supply Chain Finance Group consists of three products: Channel Finance, Supplier Finance and Sales Finance, all with a focus on delivering working capital financing products that support the growth and liquidity of buyers and sellers of products in technology, manufacturing, distribution, retail, consumer products, aerospace, automotive, and energy. These programs are individually tailored and address both payables and receivables for companies and their trading partners, helping to support their operations with liquidity to keep supply chains moving.”
Mercator recently published a report entitled Supply Chain Finance is Coming of Age, which delves into the reasons behind increased adoption of SCF along with explanations of its various forms. Wells’ SCF Group seems to be aligning itself to more adeptly pursue both certain vertical industries (such as technology) as well as expand the use of payables and receivables related products. Given the various economic headwinds around the globe, as well as broader impact of financial regulations, asset based lending and other alternative forms of managing working capital have been expanding.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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