Goods may sit in factories, warehouses, containers, vessels or trucks, but if cash is stuck, the entire chain slows down or even breaks. Supply Chain Finance (SCF) bridges logistics, trade and banking, helping businesses solve working capital constraints, reduce risk and strengthen competitiveness.
Cash flow: the hidden lifeblood behind physical flows
In a typical supply chain, a shipment from supplier to buyer passes through numerous stages: ordering, production, inland transport, export operations, international carriage, customs clearance, distribution and retail. At each stage, cargo moves, but money waits. Sellers usually get paid only after goods are delivered, invoices are issued and accepted, and payment terms of 30–60–90 days are honoured. Meanwhile, they must carry the costs of materials, labour, logistics, storage and interest.
For SMEs, especially those supplying global brands, the burden of trade credit can be heavy. They often accept long payment terms to secure contracts, yet lack the collateral and credit rating needed to borrow at reasonable rates. Many firms with strong orders and good markets still “run out of breath” because they lack working capital, forcing them to scale back or forgo growth opportunities.
Buyers are not immune either. If suppliers run short of cash, production quality can suffer, deliveries are delayed and the whole chain is exposed. This is where SCF comes in. Instead of each company struggling with banks on its own, SCF mechanisms allow buyers, suppliers and financial institutions to share information and spread risk based on the strength of the entire chain, not just on individual balance sheets and collateral.
From paperwork to digital supply chain finance platforms
In practice, many SCF-like solutions have long existed around logistics activities, even if they were not labelled as such: pre-shipment and post-shipment finance, invoice discounting backed by transport documents, export document forfaiting, or financing based on electronic delivery orders and third-party confirmations from logistics providers. The common thread is that cash is unlocked based on evidence of goods movement, rather than waiting for contractual payment due dates.
Digital technology is now pushing SCF into a new era. E-invoices, electronic bills of lading, tracking data, warehouse receipts and proof-of-delivery events can all be digitised and connected via APIs between businesses, banks and logistics providers. This shortens verification times, enhances transparency and allows working capital to be released much faster and more safely than under paper-based procedures.
One illustrative model is reverse factoring: a large buyer signs an agreement with a bank whereby the bank pays approved suppliers shortly after invoice acceptance, while the buyer settles with the bank on the original due date. Interest rates for suppliers are based on the buyer’s stronger credit rating, not their own. When logistics data – such as confirmation that goods have been loaded, shipped or warehoused – is integrated into the decision process, lenders gain even more confidence to disburse quickly.
At ecosystem level, connecting SCF platforms with logistics systems (TMS, WMS, port and customs systems) can create an integrated “fin-log” infrastructure. In such a set-up, each physical supply chain event (goods loaded on a truck, gate-out from port, arrival at ICD, inbound at warehouse) can trigger a corresponding financial event (partial disbursement, invoice discounting, release of reserves). This marks a shift from traditional trade finance to logistics-backed, event-driven financing.
A roadmap for Vietnamese firms: connecting logistics, banks and technology
To benefit from SCF, Vietnamese businesses need to move from a narrow “borrowing mindset” to holistic cash flow design. The starting point is to map their own cash conversion cycle: where is capital locked up the longest? How long does it take from buying raw materials to collecting receivables? Which points in the chain generate reliable documents or data that could underpin financing? With this picture in hand, companies can decide which forms of SCF make sense: pre-shipment, post-shipment, invoice discounting, or multi-party structures involving both anchor buyers and banks.
Next, firms should treat logistics providers and banks as part of a “triangle”, not separate worlds. Logistics companies – especially 3PLs and 4PLs – understand the physical flows best and hold real-time operational data. Banks provide capital and risk management expertise. The company itself knows its production and commercial needs. When these three sit around the same table, they can co-design SCF solutions anchored in real operations: inventory financing based on stock held in 3PL-managed warehouses, milestone-based financing linked to logistics events, or blended products where both goods in transit and receivables are considered.
In the longer term, joining digital ecosystems – from e-invoicing and eBL/eDO to SCF platforms – will help SMEs become “visible” to lenders and investors. Clean, consistent operational and payment data over time constitutes a form of intangible asset that can support better financing terms, beyond traditional collateral.
Finally, SCF should be viewed not only as a funding source but also as a risk management tool. When cash flow is tied to performance indicators such as quality, delivery reliability and compliance, SCF mechanisms act as a soft discipline inside the chain. Strong performers gain better access to funding; weak links are incentivised to improve or gradually replaced.
Supply chain finance is not a magic wand that erases all capital constraints. It is a way to redesign cash flows based on the collective strength of the chain. When logistics data is digitised and shared, banks have more confidence to lend, companies gain breathing space, and anchor buyers secure more resilient supply bases. In this sense, cash flow becomes a kind of “invisible logistics”: if carefully designed, it helps the whole chain move more smoothly and withstand shocks more effectively.
In an environment of volatile interest rates, rising ESG expectations and intense supply chain competition, Vietnamese firms cannot focus solely on cutting freight or warehousing costs while ignoring cash flow dynamics. Properly implemented, supply chain finance is a chance to connect logistics, banking and technology, turning operational data into a foundation for funding. When money flows and physical flows are designed in sync, supply chains become not only faster and cheaper, but also more resilient. That is how Vietnamese businesses can step more confidently onto regional and global value chain stages.
