Supply Chain Finance
Finance for a strong supply chain. Supply Chain Finance @ New Terminal One has been developed especially for selected New Terminal One suppliers. Being a multibank solution, Supply Chain Finance @ New Terminal One is an extremely cost-efficient way for suppliers to convert 100% of the value of their receivables into non-recourse cash at a very attractive discount rate.
Supply Chain Finance - an alternative form of finance
The Supply Chain Finance @ New Terminal One Program helps to improve the cash flow of selected New Terminal One suppliers and optimizes their working capital. The cooperation between New Terminal One and its suppliers will become even more efficient with the utilization of the SCF Program.
New Terminal One is responsible for the introduction of the Program and the organization of cooperation between the involved partners.
For providing a platform for the management of funding, New Terminal One has opted for Innervation Finance Group, Inc., one of the leading companies in the field of supply chain finance solutions. Through its Internet-access for New Terminal One suppliers the InnervationSCFTM platform offers a very efficient and user-friendly interface.
New Terminal One has chosen InnervationSCFTM, the leader in the development and management of global, major, successful Supply Chain Finance (SCF) programs, to provide the financing platform and act as the buyer of the receivables. Please find more information at: [http://www.InnervationSCF.com].
Summary of Supplier Benefits
Cash flow improvement
Working capital optimization
Cost reduction
Transparency of cash flows
Sale of receivables for non-recourse cash improves liquidity, reduces Days Sales Outstanding (DSO) and improves the debt/equity ratio.
Get automatic payments for invoices once they are approved and reduce Account Receivable costs relative to New Terminal One receivables.
Suppliers can view the approved payments (receivables) immediately on their SCF web portal and see payment amounts and dates at an early stage.
Supply Chain Finance at Work
Discounting options
A supplier can choose from two types of accounts to sell his receivables:
1. Auto-Discount
Supplier elects up-front to automatically sell all New Terminal One approved payments (receivables) to InnervationSCFTM at the pre-negotiated discount rate.
2. Manual-Discount
Supplier has the option to select which of the approved payments (receivables) it would like to sell to InnervationSCFTM at the pre-negotiated discount rate and the timing of such discounts.
SCF Program Main Points
Program Fee
The only cost of the program is the discount charge that a supplier pays on the face value of the receivable to receive early payment.
The current annualized discount rates are based on the supplier’s annual volume with New Terminal One:
Annual supplier volume with Siemens
Supplier Fee
≥ 500k USD
1.50 % p.a.* + SOFR**
≥ 300k USD, < 500k USD
1.75 % p.a.* + SOFR**
< 300k USD
2.50 % p.a.* + SOFR**
* The fixed fee is covering the costs of the program as well as those of the banks providing the fund for the benefit of the suppliers.
** The underlying interest reference rate depends on the currency of the invoice and is fixed in the corresponding contract with InnervationSCFTM, e.g. for USD invoices the relevant rate is the SOFR (+ credit adjustment spread) – the negotiated payment term (e.g. 90 days) is relevant for the calculated SOFR (e.g. 3M SOFR).
Sample calculation
A supplier delivers products worth 100k USD. The payment is due in 90 days (net). When participating in the SCF program, the supplier will receive the payment 80 days earlier.
Name
Calculation
Comments
Discount rate
1.5 % + e.g. 1.6 %
Annualized
Discount charge
USD 689
100k USD x 3.1 % x (80 / 360)
Discounted value receivable
USD 99,311
cash received by supplier
Cash flow benefit
USD 22,069
payment after 10 instead of 90 days
Discount charge as a percentage of the receivable: 0.69 %
Criteria to join the program
- The supplier needs to be based in one of the following countries
- The minimum yearly PVO of the supplier should not be less than 50k USD (or equivalent)
- The ERP system of the buying New Terminal One entity needs to be connected to the InnervationSCFTM platform and offer the currency indicated – please ask your contact at New Terminal One or the Supply Chain Finance @New Terminal One advisors.
How to join the program
- Please enter the InnervationSCFTM portal to get to the online setup form
- Then follow the steps described on the page – for any questions please get in contact with the InnervationSCFTM support team or the Supply Chain Finance @ New Terminal One advisors
- Finally scan and email the requested and signed documents to [email protected] (sending the original documents by mail isn’t necessary)
Contact & Information
Your contact at the New Terminal One Business is available for further information. In addition the Supply Chain Finance Team of New Terminal One in the US gives further support and advice – for more information click here or contact us via: