what does supply chain insured mean exactly?

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  • Moneybags #8033

    what does supply chain insured mean exactly?

    loopy #8034

    AFAIK, there is no good explanation of that for investors. There is this:

    A look into supply chain finance

    My understanding of Supply Chain Finance is as follows. A supplier has an order from buyer, but needs to purchase materials to fulfill that order. In this case, Marketlend pays the invoices for the order materials directly (and does not remit funds directly to this suppler/borrower). When the order is completed and delivered, Marketlend receives the payment from the buyer and covers the capital and interest costs of the “loan” before remitting any extra to the supplier/borrower.

    If the finance is insured, then if something goes wrong and the payment from the buyer is not recoverable, the insurance will kick in and compensate investors. Subject, of course, to the usual conditions on Marketlend’s insurance policy.

    Please note I am a fellow investor and not associated with Marketlend, so this is not an official response to your question.

    Moneybags #8036

    Thanks for the reply.

    So the type of loan is called supply chain financing?
    And the insurance company pay out if the invoice is not paid or loan repaid by the company?

    The wording on this site confuses me, especially this part in this instance…

    Loan term (Months)
    12 months – Supply Chain INSURED

    To me that says that the insurance is the invoice being paid by another company not by the insurance company.

    leotyndall #8041

    Dear Moneybags,

    We apologise if Loopy and you do not think there is a good enough explanation, I must admit with the public disclosure statement available to you, and then portal support channel where we explain it in detail as well asthe blog, we did consider there were a number of explanations.

    In addition if you watch the video on the home page I explain in detail how it works.

    Here is the link: https://deskportal.zoho.com/portal/marketlend/kb/articles/inventory-finance-supply-chain-finance-how-does-it-work

    Let me explain it again, 

    Supply Chain Insured is the following:

    a line of credit or overdraft is granted to the trade account.
    Marketlend pays the supplier or the trade account for supplies pursuant to an insurance policy, that has specific conditions on age and types of invoices to pay.
    In 90 days, Marketlend seeks payment from the trade account.
    If payment is not made, then it becomes a collection matter, and the insurer is advised.
    If after 7 days it continues to be outstanding, a stop event is called, no more supplies are purchased, the matter is then managed by the collection division and usual collection procedure as set out on our site occurs.

    See https://app.marketlend.com.au/collections-systems/

    Obviously if it eventuates that there is no payment we make a claim on the insurer and repay the proceeds we receive from the insurer and the provisions to the investors to seek to make them whole.

    I hope that helps.

    Kind regards,
    Leo Tyndall


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