The Inventory Financing Study Based On Supply Chain Logistics Integration

In recent years, inventory financing is risen in China's logistics industry, namely the being use of existing stock or business of the future delivery of goods in transit rights as collaterals for secured financing. It is a new integrated operation model for business integration between banking, logistics and production, and it becomes a huge potential new economic growth point. In this paper, through empirical research and the literature study, we could implement such methods, such as vendor financial arrangements, distributor financial arrangements, under the poor financing conditions which there are much stock or long period of debt receivables; and gives details of the supply chain financing services products, including: buyer's credit, inventory financing for debt receivables, factoring business, inventory financing for warehouse. Through thesis of the new Basel II and theory of financial risk management, this paper analyzes three main aspects of inventory financing risk from the credit, operational, legal.On the basis of theory, the paper gives examples, which are implemented successfully in steel industry and coal industry on inventory financing solutions. These successful solutions indicate that inventory financing could be feasible and effective for the operation in China's market and do examples for another business on scope of inventory financing. According to the operational and financial condition of Shenzhen Sang Fei Consumer Communications Co. Ltd, the paper makes a introduction of inventory financing service that does pledge by warehouse receipt for electronic components and does factoring business by logistics financing service agency, which could improve Sang Fei's beneficial results on operation and finance. This paper also introduces the difficulties facing on practice.