Supplier Finance

Supplier Finance services address the needs of large corporations with wide supplier networks. Our services can help you lower the cost of capital for domestic and international trading partners, while meeting your target payables terms and cost reduction objectives.

How Supplier Finance works

Through the program buyers can either negotiate extended payment terms or a cost of goods sold reduction in return for giving suppliers access to lower cost financing. We provide suppliers with a discounted early payment at an improved rate based on the buyer's credit risk.

Diagram showing how Wells Fargo supplier finance services work.

  1. Supplier ships goods and invoice to buyer (Day 1)
  2. Buyer approved invoice for payment (Day 5)
  3. Wells Fargo Capital Finance notifies supplier of invoice approval (Day 5)
  4. Supplier sells invoice to Wells Fargo Capital Finance at a discount to receive immediate payment (Day 5)
  5. Buyer pays Wells Fargo Capital Finance invoice amount on due date (Day 90)

Potential benefits for buyers

  • Reduce cost of goods sold
  • Increase days payables outstanding
  • Gain cash flow certainty
  • Strengthen financial supply chain
  • Improve relationships with suppliers
  • Reduce supply chain financing costs

Potential benefits for suppliers

  • Gain access to an attractive liquidity management tool through the early payment option
  • Increase cash flow, reduce accounts receivable and days sales outstanding
  • Reduce capital costs (such as accounts receivable carrying costs)
  • Strengthen financial position
  • Receive full payment transparency
  • Receive information and payment in a format that best suits your needs