Supplier Diversity: 4 Ways C2FO’s Opportunity Marketplaces Can Benefit Your Company
February 16, 2022 |
The C2FO Team
Diverse suppliers face significant challenges, but large corporations can help by creating their own Opportunity Marketplaces with C2FO.
Many large enterprises work hard to support diversity and inclusion in their supply chain because of the value it creates. A supply chain is ultimately more sustainable and innovative when it includes underrepresented companies.
Unfortunately, becoming a supplier is only half the battle for diverse companies. They also have to deal with a financial system that often makes it harder for them to thrive, especially when it comes to accessing working capital.
Minority-owned businesses are less likely to receive all the financing they seek, according to the 2021 Small Business Credit Survey from the Minority Business Development Agency (MBDA) in the US Department of Commerce.
Black-owned companies are half as likely as white-owned companies to be approved for all the financing they seek, even among businesses with good credit scores, the survey found.
Historically, minority-owned businesses have also reported paying higher interest rates on loans, the MBDA reported in 2010.
If diverse companies can’t get financing, they won’t have the resources to keep the lights on and keep growing.
The good news is, large corporations can level the playing field to a degree with supplier diversity programs that offer technical and financial support, such as accelerated payments. One new and exciting type is C2FO’s Opportunity Marketplaces.
What is an Opportunity Marketplace?
On C2FO’s platform, enterprises can create a dedicated marketplace where diverse suppliers can request accelerated payments on their invoices at competitive rates.
Early payment puts working capital into those companies’ accounts faster, and unlike traditional lending, it doesn’t require a credit check or new debt. It’s a reliable, risk-free funding source for diverse businesses.
Even better: C2FO’s Opportunity Marketplaces can also be tailored to work in alignment with any existing accelerated payables program you offer your trading partners.
Some of the world’s leading companies are using Opportunity Marketplaces to support diversity and inclusion efforts.
Albertsons Cos. is a great example. Its Opportunity Marketplace, launched in 2021, aims to help diverse-owned businesses alleviate immediate capital challenges by making access to working capital more equitable by providing funding at significantly lower rates.
“Thoughtful and bold practices are essential to Albertsons Companies’ diversity efforts,” said Jonathan O. Mayes, SVP and chief diversity and inclusion officer for Albertsons. “With our dedicated early payment marketplace from C2FO, we help suppliers enhance their cash flow and expand our ability to support diverse businesses.”
Here are four ways your company could benefit from an Opportunity Marketplace:
1. Meet key financial metrics
You have the flexibility to fund an Opportunity Marketplace on-demand from your balance sheet, C2FO’s funding network or a combination of both. C2FO will work with your organization to identify the appropriate funding solution to fit your needs. Our Capital Markets team is able to explore incorporating diverse bank partners to support your programs.
Use your balance sheet for your Opportunity Marketplace, and you’ll:
Improve your gross margin, EBITDA and earnings per share
Increase returns on short-term cash
Earn incremental discount income
Reduce cost of goods sold (COGS)
Use other funding sources, and you’ll:
Maintain your days paid outstanding (DPO) and free cash flow (FCF) as needed
Optimize your working capital
Experience zero impact on your suppliers
Preserve cash and protect your balance sheet
No matter what option you choose, you’ll improve your suppliers’ financial health without impacting your working capital position.
2. Meet your Environmental, Social and Governance (ESG) goals
As a global technology company, C2FO provides measurable data to track and audit your funding to diverse suppliers, supporting your broader ESG goals.
Data received allows us to report on the flows of liquidity to this segment, providing your company the opportunity to highlight the amount of funding and support provided to companies owned and operated by women, and members of socially and economically underrepresented groups via the C2FO platform.
3. Attract diverse suppliers and build a robust network
As a leader in your industry, you understand the importance of having diverse companies in your supply chain. You likely have initiatives in place to attract diverse business partners and help secure their financial futures.
Together with C2FO, you can enhance the success of these efforts by providing diverse businesses with access to low-cost capital and other resources that can help fuel their growth.
4. Supporting your supply chain
Diverse businesses are crucial to your supply chain, yet they can be inherently financially fragile. By creating an equitable marketplace with reduced rates that addresses the financial headwinds that diverse businesses face, you can create a safe harbor that nourishes growth through greater opportunity.
Offering competitively priced access to capital empowers diverse businesses to achieve their goals and thrive.
Learn more about how C2FO’s platform can help your enterprise meet its financial and ESG goals.