With Early Payments, suppliers can optionally offer their open trade receivables to their debtors for early payout, who then obtain individual cash discounts. If no Early Payment is agreed, the supplier can offer their trade receivables to a large investor base. Thus they are independent from the debtor’s liquidity or their willingness to make an early payment.
By using their liquidity with Early Payments, debtors gain (additional) cash discounts on their liabilities. In times without excess liquidity, other investors, i. e. institutional investors, can support suppliers by providing financial backings.
External financing by means of auction or Early Payment by the debtor? Suppliers and debtors can individually decide for each invoice, which better suits their company’s current situation.
Here you can buy and sell trade receivables (€, $, £): as a supplier you sell your outstanding invoices, as a debtor you initiate supply chain financing programmes, and as an investor you buy a new asset class.