Author Archives: David Gustin



About David Gustin

David is the founder and President of Global Business Intelligence (“GBI”) since 1996 and the co-founder of Trade Financing Matters. For almost 20 years, David has been running a global research and advisory practice centered on helping banks, vendors, and corporates with trade services, trade credit and financial supply chain matters. His clients included financial institutions, financial technology vendors, transportation vendors and professional service firms. As Co-founder of Trade Financing Matters, part of the Spend Matters properties David supports all things working capital and is currently involved in projects around alternative lending models. You can reach the author at dgustin @ tradefinancingmatters.com


Supply Chain Finance: Gray Area Abounds on Early Pay Programs, Accounting

Whichever way you look at it and define it, supply chain finance has grown into a big number. And if you define it as using the balance sheet of a large company to offer early payment to some or all of its suppliers, it is has gained in popularity. Plus, it’s not only offered by large banks who can both originate and distribute large-scale programs for the likes of Unilever or Procter & Gamble, but also non-bank asset arrangers like Greensill, Seaport and others working together with source-to-pay platforms or directly with buyers to develop programs. And always in the background we have heard this whispering of accounting treatment. And by now, most people who have dabbled in this space know the issue: Is it trade payable or is it debt? Fewer understand the implications.

Why Platforms Need to Monetize Their Supplier Ecosystem

Because P2P solutions started giving away supplier portals, cash flow optimizers, analytics, support, etc., they closed a revenue door. Trying to build a sustainable business model when half your ecosystem is not monetized is very challenging, even as P2P platforms add features and functionality. Sure, many platforms are trying to figure out payments, and that is something that scares the bejeebers out of them due to regulations and compliance rules. (Don’t pay that blacklisted vendor or person, or else.) But payments is not a profitable business for platforms, it’s a service.

Post-Confirmation Dilution in an Uncertain Credit World

e-invoicing

How long has this benign credit cycle been going on? How about since 2008, when the Fed began dumping money into the economy to go way beyond its mandate as a last-stop liquidity gap. This has led to many distortions in the credit and capital markets, and one area where this is poorly understood is around “approved” invoices. Despite what many players in the space might believe, underwriting is necessary — even  critical. Even though the invoices that are on the platform are, by definition, approved for payment (i.e., highly de-risked), they are by no means risk-free.

Using Information Advantages to Finance B2B Transactions

We've all heard the stories around how supply chains are digitizing. A real transformation is underway, no doubt. But transformations don’t happen overnight. Likewise, traditional forms of financing supply chains still dominate. Many new models of lending have emerged over the last few years that rely on the approved invoices and third-party money, and while some models have generated volume, these pale in comparison with total B2B transactions. This is not to say there are not failures. In fact, the innovations that have been tried and failed lead to further innovation, piggybacking off of lessons learned.