B2B Payments

Greensill To Drop Clients Abusing SCF To Lengthen B2B Terms

Supply Chain

With “formal notice” provided to its clients that demand lengthier payment cycles, supply chain finance company Greensill said it has provided a last warning to firms that use its offerings to extend small business payment terms further than 30 days.

The caution comes after reports that a part of CIMIC, a contracting firm, was still offering Greensill’s supply chain financing products with payment terms as long as 95 days even with a commitment from founder Lex Greensill earlier this year to stop the practice, The Australian reported.

“In February, we informed all of our Australian clients that we expected compliance with our public statement to not let clients use Greensill’s SCF [supply chain finance] to push out payment terms to [SMB] suppliers beyond 30 days. We are proud to say that virtually all of Greensill’s clients in Australia are fully compliant with our statement for SCF facilities provided by Greensill," the company said in a statement.

Greensill also noted in the statement that it has "allowed a period for the remaining clients to complete their internal reviews stemming from our request.”

But the outlet claimed that documents it saw indicate that CIMIC-owned UGL was still offering the supply chain services of Greensill to small companies tendering for work in April on a project for an invoice discount. The move, the outlet contended, put the founder’s commitment to get rid of customers that have payment terms of over 30 days into question.

Kate Carnell, the small business ombudsman for Australia, said per the outlet, “We welcome Greensill’s public statement today, reiterating its position that it will not allow its supply chain finance facilities to be used by Australian clients which extend payment terms to [SMB] suppliers beyond 30 days.”

As previously reported, Carnell was advocating for federal legislation requiring that SMBs receive payment in 30 days, according to a LinkedIn post she wrote. The official wrote that her office experienced a wave of large firms “using the COVID-19 outbreak as an excuse for poor payment times.”

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