GT Nexus helps MAS & Brandix access capital faster

International Finance Corporation (IFC) has visibility into trading partner information and transaction data through GT Nexus that make it possible for the financial strength of the strongest party to be leveraged to deliver more competitive financing opportunities in the supply chain.

Tapping into a cloud based network allows financial services providers to have deeper visibility into transactions, which results in greater financing opportunities for them and lower capital costs for the parties involved.

The bigger implication of this is as follows: Last week, Chinese interest rates spiked once again, causing concern for exporters who need to borrow cash to finance production and, in turn, U.S. companies who source from Asia-Pac since their margins are impacted by supplier lending rates.

On Monday, Sept. 23, the Chinese overnight rate (Shibor) surged to 3.81 percent, up from less than 3 percent at the beginning of the month. The one-month borrowing cost jumped to 6 percent from 4.5 percent. A similar liquidity crisis hit in June, sending the overnight borrowing cost to 14 percent. Fears of another Chinese credit crunch have emerged.

With escalating Asian labor rates and now interest rate pressures, U.S. companies are seeking new methods to ensure their global sourcing strategies remain profitable.

MAS and Brandix are the latest companies to turn to cloud-based supply chain networks where financial services providers can deliver access to capital based on the financial strength of the strongest party in the chain. Cloud platforms allow U.S. companies to easily leverage their own credit to finance Asian production and increase margins on final goods.

GT Nexus