Over on Supply Chain Matters, Bob Ferrari recently described how Wal-Mart is putting its supplier development money where its mouth is for apparel suppliers, the group most likely impacted by CIT’s bankruptcy filing (which you can read expert opinion on here and here). According to Bob’s analysis, eligible suppliers in the program “will be able to get payment on their shipment invoices to Wal-Mart in ten to fifteen days vs. Wal-Mart’s typical 60 to 90 day payment cycle, by having the ability to factor their receivable invoice with a select group of banks including Wells Fargo & Company and Citigroup Inc.”
The operative word here is “factor”. Invoice factoring and trade finance, two cornerstones of CIT’s business model, proved a highly lucrative niche, especially for suppliers that did not have A-rated investment trade paper, but who were not quite high risk (a great place to be as a lender in a rising market, but a dangerous one during a contraction).
Read this and other articles @ Spend Matters