Traditional supplier finance programs unlock vast amounts of low-cost capital—but mostly for last mile end users and their direct vendors. These arrangements rely on long-term relationships, contractual guarantees, and trade insurance to de-risk lenders and corporates.

But what about the rest of the supply chain?

Take a simple t-shirt (see illustration). When you factor in the fibre, yarn, and fabric required to produce it, the aggregate capital coverage needed can be up to three times the value of the final finished good—and with high-cost and limited financing available, this can greatly increase the risk and cost to end users without then knowing.

Through deep engagement with growers, manufacturers, traders, and brands, Sourcery has identified that up to 15% of finished goods costs can be traced back to high-interest working capital and limited access to finance upstream—among those growing, processing, storing, and manufacturing the raw materials that make the entire trade possible.

Fifteen percent may seem minor—but it’s a lot when you consider that traditional price negotiation on a t-shirt comes down to a few pennies.

Using the illustrated example, 15% of the finished good cost is $56,000 USD that is attributed to interest alone—enough to pay 160 farmers who grew the cotton a $0.65/kg ($0.29/lbs USD) premium for meeting commercial, social, and environmental impact requirements or can reduce the cost of a t-shirt by as much as $0.22 per piece without reducing the margins on any of the vendors upstream.

Since day one, Sourcery has worked with its Partners and forward-thinking financial institutions to design fit-for-purpose finance solutions—unlocking capital that is more transparent, efficient, and equitable for everyone, from grower to consumer.