The Present Situation And Risks Of The Supply Chain Finance Of The Steel Distribution Companies

Since the 2007 financial crisis, every walk of life has been influenced more or less. Recently, it seems there are signs of recovery, but meeting with inflation, all commercial banks begin to squeeze money. Steel distribution companies, especially small and medium enterprises in the supply chain of steel, are in bad condition and can not completely solve the problem of shortage of fund, through traditional financing channels.Base on this background, various financing models based on the Supply Chain Finance solve the bottleneck of funds for the steel distribution companies in terms of another way. Therefore, the Supply Chain Finance is widely used in the steel distribution companies.To analyze and study the Supply Chain Finance of the Steel distribution companies on the basis of understanding the steel distribution companies and the Supply Chain Finance, including its status and mode of operation, roles and risks, prevention measures.During the Supply Chain Finance of the Steel distribution companies, banks load to the Supply Chain consisting of the core steel business and the SMEs of its upstream and downstream, mainly according to the credit guarantee of the core steel business, and thus into load to SMEs. The main mode consists of the Guarantees cashing in financing warehouse, the financing model receivable accounts, and the Chattel Mortgage mode. According to the author's own experience and understanding about the Supply Chain Finance of the Steel distribution companies, this paper describes various models' content, process, functions and role combined with actual cases.The Supply Chain Finance broadens the financing channels for the steel distribution companies, and provides a guarantee for the SMEs, and improves the velocity of the circulated steel in the steel supply chain, and adds a new profit growth point for the banks and the logistics companies.The Supply Chain Finance of the Steel distribution companies develops rapidly, but there are some risks that can not be ignored. The factors of risks exist mainly in the system's interior and exterior aspects. The internal risks include principally the core steel businesses'moral and credit risks and management risks, and the SMEs'financial risks, and the banks'risks of reviewing credit and assessment for price, and the management risks in the logistics companies. The external risks factors mainly include the impact of the macroeconomic environment and the legal loopholes, also include some sudden disasters. Preventive measures should base on the overall situation, and help all participators form a long-term strategic partnership for sharing benefits and undertaking risks, and develop healthily through the Supply Chain Finance of the Steel distribution companies.The Supply Chain Finance is an innovative financial service model. It has been used extensively, and it is developing and changing quickly. Now the electronics supply chain finance and many new models are also beginning to be used and promoted. In the future, the Supply Chain Finance will help the steel distribution companies develop sanely. The Supply Chain Finance of the Steel distribution companies will become more mature.