Supply Chain Finance Program ROI Calculator — SCF & Early Pay

Calculate the ROI of a supply chain finance program for buyers and suppliers. Early payment discounts, working capital improvement, and supplier financial stability benefits.

Quick answer: Supply chain finance programs let buyers pay suppliers early using bank financing at lower cost. Buyer saves 1–3% on invoices. Supplier gets faster cash. Bank makes the spread. Win-win-win at scale.

💰 Supply Chain Finance Program ROI Calculator

Annual Payables in Scope ($)

Supplier invoices eligible for SCF program

Supplier Participation Rate (%)

Current Payment Terms (days)

Early Payment Days (via SCF)

Supplier Discount for Early Pay (%)

Discount supplier offers for payment in N days

SCF Program Financing Cost (%)

What the bank charges buyer for early payment financing

Annual Net Buyer Saving

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Gross Early Pay Discount

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SCF Financing Cost

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How to Use This Calculator

Enter annual payables in scope — supplier invoices eligible for the SCF program — typically your top 50–100 suppliers by spend.
Set participation rate — not all suppliers will join — smaller suppliers benefit most (their borrowing cost is highest).
Model the rate — buyer borrows at bank rate, effectively lending to supplier at bank rate. Supplier gets early cash cheaper than their own bank.

Worked Example

$8M payables, 55% participation, net-45 terms, pay in 5 days, 1.5% discount, 0.8% financing cost.

Eligible payables: $4.4M
Gross discount: $66,000
Financing cost: $4,4M × 0.8% × 40/365 = $3,867
Net buyer saving: $62,133
Annualised rate: 13.7% APR (supplier pays vs their own credit)

At 13.7% APR, SCF is attractive for small suppliers who pay 15%+ on working capital lines. Large suppliers with strong credit (borrowing at 6%) will skip it — the discount costs them more than their own borrowing.

Frequently Asked Questions

SCF is a buyer-led program where a bank pays suppliers early on behalf of the buyer. The supplier gets early cash, the buyer extends payment terms or earns a discount, and the bank charges a spread. Differs from factoring (supplier-led, buyer not involved) and dynamic discounting (buyer funds early payment from own cash).

Dynamic discounting: buyer uses own cash to pay suppliers early in exchange for a discount — higher return than money market, lower cost than SCF for suppliers. SCF: bank finances early payment — buyer can extend terms further. For buyers with excess cash: dynamic discounting. For buyers wanting to extend payment terms while helping suppliers: SCF.