Supplier Guarantees (also referred to as Vendor Guarantees) is a tool available to purchase needed materials or goods from your supplier for larger orders that require inventory purchases exceeding the credit availability with your vendors.
How does it work?
Basically, the Supplier Guaranty is an agreement between your company, your supplier, and Advantage Business Capital, in which we agree (guaranty) that once the goods have been shipped, and are accepted by the end user, that funds generated from the factoring of the invoice will be wired directly to the supplier.
In the case where the supplier drop-ships directly to the end-user, Advantage would fund the supplier invoice with the agreement that the goods are shipped upon receipt of the funds.
The Supplier Guaranty presumes there is an excellent relationship and history between all parties. The supplier is confident that their products meet the specifications of the order, is confident that their customer can deliver to the end-user, and is comfortable with the financial strength and the customer relationship with Advantage Business Capital.
The benefit to your supplier includes a guaranty of payment for their invoices and the ability to increase sales to your company. Factoring together with Supplier Guarantees is a powerful combination for all parties to increase their sales and benefit from the transaction.