A recent Walmart mass correspondence to suppliers stated that it would require simplified payment terms to better align with its average total days of on-hand delivery as well as more flexibility on warehouse allowances and defective allowances. This puts suppliers in a cash squeeze.
To assist cash strapped suppliers Walmart is offering a supply chain financing program—whom the company at the same time is refusing to pay more quickly without significant discounting—with an option of borrowing money from Walmart, with interest, if the slower collections are hurting the suppliers’ cash position. Those who seek gap financing through any other institution will not be allowed to participate in the Walmart Supplier Alliance, the memo warns.
Source: NACM (National Association of Credit Management)
