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Democratizing Supply Chain Finance with Buy Now, Pay Later

Democratizing Supply Chain Finance with Buy Now, Pay Later

Inflation in the United States has hit a 40-year high. 81% of Americans are worried a recession will hit the United States in 2022. Large big-box retailers are reducing inventory levels and cancelling orders.

Growers who export products to the United States are frequently forced to bear the risks of non-payment due to order cancellations.

To Protect Growers, Plants Without Borders is using Buy Now, Pay Later technology to democratize access to supply chain financing.

 

This is How Orders Happen Now:

  1. Seller sends availability to Broker.
  2. Buyer places an order with the Broker.
  3. Broker places an order with the Seller.
  4. Seller sends plants to Port in Guatemala.
  5. Broker arranges for transportation to Buyer (Grower in Florida).
  6. Retailer places an order with the Buyer (Grower in Florida).
  7. Buyer (Grower in Florida) pays the Broker.
  8. Broker pays the Seller.

 

This is What Can Go Wrong:
  1. Seller sends availability to Broker.
  2. Buyer places an order with the Broker.
  3. Broker places an order with the Seller.
  4. Seller sends plants to Port in Guatemala.
  5. Broker arranges for transportation to Buyer (Grower in Florida).
  6. Retailer cancels order with the Buyer (Grower in Florida).
  7. Buyer unable to pay the Seller.
  8. Broker unable to pay the Seller.

In this situation, the Seller is left with $0 and bears all the risk of non-payment.

 

Solution with Financing:

  1. Seller sends availability to Plants Without Borders.
  2. Buyer places an order on Plants Without Borders and Shopify finances the transaction. Buyer makes first monthly installment payment to Shopify. Plants Without Borders receives full payment of the Product Value minus payment processing fees upfront.
  3. First Payment to Seller: Plants Without Borders sends the Grower in Guatemala 50%* of the Product Value once the phytosanitary certificate has been issued.
  4. Seller sends plants to the Port in Guatemala.
  5. Plants Without Borders arranges for transportation to the Grower in Florida.
  6. Grower in Guatemala sends plants to the Port in Guatemala.
  7. Plants Without Borders issues a refund to the Buyer for any spoilage.
  8. Final Payment to Seller: Plants Without Borders sends the remaining 50% minus the Sales Incentive (6.9%, 13.8%, or 20.7% based on Membership Level) and spoilage to the Grower in Guatemala.


*Incidental Deposit: Plants Without Borders has the right to withhold an amount up to the maximum fee charged by the United States Department of Agriculture for the destruction of plants that have pests or insects. In some cases this may result in the Seller receiving less than 50% of the Product Value.

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