Research On Factoring Financing Strategy Of SMES Based On Block-chain Credit Transmission Function

As the most common form of transaction among supply chain enterprises,credit sales can effectively relieve the pressure of inventory and improve the efficiency of the whole supply chain,but it can also bring a series of problems to the seller enterprises,such as capital pressure and credit risk.Factoring can provide an effective solution to these problems for sellers.However,for small and medium-sized enterprises at the far end of the supply chain,it is difficult to obtain factoring financing due to their small scale and insufficient credit,and the limited credit transmission function of core enterprises,which makes it difficult to benefit Small and medium-sized enterprises at the far end of the supply chain.Small and medium-sized businesses at the end of the supply chain now have prospects thanks to the use of block-chain in supply chain finance.Decentralization,traceability,and immutability are features of block-chain technology that can increase the transparency of supply chain information and assist supply chain finance in realizing cross-level enterprise credit transmission.At the far end of supply chain finance,factoring financing for small and medium-sized enterprises,the mechanism of the influence of block-chain is still unknown and requires more discussion.Hence,a three-tier supply chain that includes supplier,distributor,and retailer is taken into account in this article.In order to investigate the influence mechanism of the block-chain credit transmission function on the factoring financing strategies of small and medium-sized enterprises at the far end of the supply chain,factoring financing and reverse factoring financing decision-making models are built after the block-chain is embedded.The optimal financing decisions of businesses at each node of the supply chain are then obtained by using the reverse solution method.It has been discovered that the addition of block-chain technology can give small and medium-sized enterprises at the tail end of the supply chain more financing alternatives and lessen the financial strain on the supply chain.Additionally,when their own working capital is enough,suppliers and retailers sometimes select reverse factoring.Reverse factoring creates a win-win situation for all three parties by enabling suppliers to reach bigger volumes and distributors and retailers to get reduced wholesale costs.