Agile and liquid, growing supply chain finance for companies

Rising geopolitical tensions are likely to have a decisive impact on the economic scenario with rising interest rates and an overall cooling of an already fragile recovery, reversing the gradual easing of the cost of capital for companies and intermediaries. But overall, global uncertainty continues to affect the supply chain, forcing companies to keep an ever more watchful eye on liquidity and working capital. In this sense, supply chain finance proves to be a vital tool as a lung for corporate coffers.

If in 2024, supply chain finance solutions had come to capture around a quarter of the total potential market in Italia, last year they marked a new slight growth of between 1.2% and 2%, conditioned precisely by the overall climate of uncertainty, reaching a value of between EUR 565 and 567 billion in trade receivables, according to estimates by the Supply Chain Finance Observatory of the Milan Polytechnic, which will be presented on Thursday in Milan.

In 2025, with a further increase in the average cash cycle and in net operating working capital, the market served thus ends up offering a multifaceted perspective on the evolution of the choices made by companies. While factoring returns to growth with an increase of 2.5% to EUR 61.8 billion and confirming consolidates its position by registering a jump of 25% to EUR 2 billion, some solutions that had shown expansive dynamics over the last five years, including reverse factoring, purchase order finance and invoice trading, show a more or less pronounced slowdown, while advance invoicing has remained broadly stable, with a market value of EUR 55 billion.

The evolution of the supply chain finance market has led to the development of two new types ofsupplier financing solutions, which introduce as a novelty the involvement of payment service providers (PSPs) to perform immediate process-related transactions. The 'pre-maturity financing' allows the supplier to offer early payment of invoices without formal assignment of the receivable or the signing of a factoring contract. The 'post-maturity financing' allows the buyer to obtain an extension of payment terms without directly involving suppliers in a financing programme and without requiring them to assign their receivables.

With these innovative solutions, supply chain finance aims to provide companies with new tools that are flexible and adaptable to their specific needs. "Today, supply chain finance represents a key tool to face the challenges of companies in an ever-changing economic environment," says Observatory Director Federico Caniato. "More stringent information requirements may have influenced the choices of some companies, directing them towards less complex solutions for accounting representation or the impact on the balance sheet.