ESG

4 Ways a Diversity and Inclusion Marketplace Can Benefit Your Company

June 9, 2021
The C2FO Team

An early payment marketplace with preferential rates can help alleviate the challenges many diverse businesses face.

The challenges many diverse suppliers face today are significant. The existing financial system can, unfortunately, inhibit minority- and women-owned businesses from accessing affordable capital. 

Most large corporations work hard to bring diversity and inclusion to their supply chain. Diversity creates value. A marketplace dedicated to diverse suppliers will drive sustainable and innovative solutions by providing underrepresented companies the chance to grow. 

With C2FO, you can support your diverse suppliers by creating a dedicated marketplace that provides accelerated payments at competitive rates. 

A Diversity and Inclusion (D&I) Marketplace can be tailored to work in alignment with any existing accelerated payables program you offer your trading partners.

Diverse businesses face challenges to access working capital

A recent analysis of the more than $25 billion in funding provided through the C2FO platform in 2020 shows that tens of thousands of minority- and women-owned businesses participate in our early payment programs at a rate of nearly 4.1 times the participation level of other companies. 

This indicates that diverse suppliers are already attuned to early payment as a reliable, risk-free funding source. 

In addition, lending disparities impact minority-owned businesses. In 2010, the Minority Business Development Agency (MBDA) in the US Department of Commerce published a report on the disparities in capital access for minority-owned businesses. The report found that minority-owned businesses pay higher interest rates on loans. They also are more likely to be denied credit and are less likely to apply for loans because they fear their applications will be rejected.

Continued disadvantages in the existing financial system make it imperative that we do more to ensure the economic health and growth of these underrepresented and underfunded businesses.

Diversity creates value, and a dedicated, reduced-rate marketplace can help drive sustainable and groundbreaking solutions from your suppliers. By launching a D&I Marketplace through C2FO, you can ensure your company’s future with the most innovative, competitive and highest-value supply chain possible. 

Albertsons Cos. launched its D&I Marketplace with C2FO in early June to help the company boost supplier diversity as the company reaffirms its commitment to racial equity. The new program 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 & 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 can benefit from a D&I Marketplace:

1. Meet key financial metrics

You have the flexibility to fund a D&I 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 D&I Marketplace, and you’ll: 

  • Improve your gross margin, EBITDA and EPS
  • Increase returns on short-term cash
  • Earn incremental discount income 
  • Reduce COGS

Use other funding sources, and you’ll: 

  • Maintain your 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.

Working Capital. Working for Everyone.  

C2FO provides working capital solutions for you, your suppliers and your customers.

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