Supply Chain Finance Solves Industrial Suppliers’ Catch-22

How to Make Sure Large Orders Don’t Cripple Cash Flow

Industrial suppliers often face the ultimate Catch-22 in business: Big orders make it hard to pay bills. But suppliers need big orders to grow. The right supply chain finance platform solves that problem.

There’s no way suppliers can get around the fact that they have to buy raw materials. They have to pay workers and contractors. They have to pay to ship orders. Only then – 60, 90, 120 days after shipping – do suppliers get paid.

To pay bills in the interim, suppliers can turn to traditional factoring. But the process of selling a receivable to a third party who then collects from the buyer has, for good reason, a bad reputation.

But some astute suppliers are turning to Tompkins Ventures. Our partners provide a capital‑technology platform that pairs financing with capital‑intelligence tools. The platform forecasts cash needs and organizes orders so companies know exactly how much capital is required and when.

This precision reduces guesswork. Suppliers can make sure that funding aligns with project milestones, eliminating the need for large, blanket loans.

Let’s dig in and see how this digital platform solves the cash flow Catch-22.

What ‘Catch-22’ Really Means in Business

Joseph Heller’s war novel Catch‑22 gave the world a useful metaphor for no‑win situations.

In the novel, a pilot who wanted to be relieved from flying could claim insanity. But just asking for such a mental evaluation was a rational act. Therefore, the pilot was sane and had to continue flying.

The phrase “Catch-22” came to embody any requirement someone could not satisfy without already having that requirement fulfilled. Think of needing experience for a job but also needing a job to get experience. Or banks that only give loans to people who do not need them.

Or industrial suppliers, where cash‑flow issues aren’t a sign of weak demand – they are a consequence of success. Bigger customers often impose lengthy payment terms. And banks may refuse to lend because the company’s assets are tied up in inventory and receivables.

But suppliers still have to pay their bills while they are waiting to get paid.

This cash-flow Catch 22 sometimes forces business leaders to turn down opportunities or accept expensive, dilutive financing.

Turning Orders and Receivables into Working Capital

The core of our partners’ supply chain finance solution is a technology‑driven platform that organizes purchase orders, invoices and inventory in one place. By extracting key dates and dollar amounts – such as shipping deadlines, invoice due dates and vendor payments – the system reveals future cash‑flow gaps.

Often, this analysis shows that a business needs less money than it thought.

In one example, a company thought it needed to raise $4 million. But in reality, the firm only needed $1.5 million in four installments.

That knowledge helps suppliers tailor financing to actual timelines, keeping borrowing costs down.

Tompkins Ventures’ partner offers three complementary financing options:

• Receivables financing: After goods ship, suppliers frequently wait 60 to 120 days for payment. Our partner buys or advances against accepted invoices so that cash arrives immediately. Unlike traditional factoring, suppliers remain in control of customer relationships and aggressive collections are a last resort. Funding arrives quickly, giving businesses immediate liquidity.
• Inventory financing: Inventory can tie up significant capital. The capital‑intelligence platform identifies cash trapped in stock on hand or in transit. This allows structured financing that turns that inventory into working capital. Improving the cash conversion cycle frees up cash for materials and production.
• Purchase order financing: Large purchase orders require suppliers to pay vendors long before invoicing the buyer. For qualified customers, our partner can advance funds against approved purchase orders. This helps companies accept bigger contracts without draining cash reserves.

Together, these funding tools unlock the capital already inside a business and turn future revenue into immediate liquidity. Instead of relying on bank loans that can take weeks to arrange or dilutive equity capital, suppliers gain access to flexible financing that increases or decreases with their order book.

By aligning funding directly with purchase orders and receivables, our partner eliminates the contradiction between growth and cash.

Flexible Financing That Grows with You

Industrial suppliers aren’t all alike. Some fill a handful of high‑value orders each quarter; others manage dozens of smaller projects simultaneously. Our partner’s supply chain finance program adapts to both, stepping in to finance projects at the scale industrial suppliers require.

Eligibility is transparent: the platform flags which buyers, purchase orders and invoices qualify, allowing onboarding to be completed in days.

As the platform learns more about a client’s business, financing can be provided earlier in the sales cycle. Qualified suppliers can borrow against approved purchase orders to pay for materials costs. Because financing is based on real orders and invoices, it expands as the business grows and contracts naturally during slower periods.

The program is also flexible when circumstances change. If a buyer extends payment terms, our partner works with the client to adjust repayment schedules rather than forcing renegotiation. By helping businesses shorten days sales outstanding, lengthen days payable outstanding and reduce idle inventory, the program turns small operational improvements into significant gains.

Supply Chain Financing Turns Daunting Orders into Opportunity

Rapid growth shouldn’t create a liquidity crisis.

Let Tompkins Ventures help you solve the cash flow Catch 22. Tap into supply chain financing that lets you accept large orders with confidence. Pay employees and vendors on time and preserve healthy balance sheets.

Factoring is slow, rigid and expensive. Our partner is fast, flexible and friendlier to a growing industrial supplier’s budget. Costs can average as low as 1-3% of your receivables.

Reach out and discover how to turn daunting orders into opportunity by combining receivables financing, inventory financing and purchase order financing with data‑driven capital intelligence and enterprise‑grade financial tools.

Finally, companies no longer need to choose between growth and cash flow. With Tompkins Ventures, they can unlock the capital already in their business and scale with ease.

Related Reading

• For Hypergrowth, Cash Flow Often Beats Raising Capital
• Supply Chain Finance Beyond the Big Banks
• “What would 10 extra days of payables do for your liquidity – without you funding it yourself?”