How Supply Chain Finance Works for Fuel Distributors

Fuel distributors typically operate on thin margins (2-5%) with large transaction volumes. Payment terms of 30-60 days create significant working capital gaps. A distributor moving 500,000 liters/month at $23/L has $11.5M MXN tied up in receivables at any given time.

Supply chain finance (SCF) is a set of financial solutions that optimize cash flow by allowing businesses to extend payment terms while giving suppliers the option of early payment. Key SCF products include: invoice factoring (sell receivables at a discount), dynamic discounting (early payment in exchange for a discount), and reverse factoring (buyer-led programs where funders pay suppliers early).

In Mexico, factoring rates range from 2-5% per 30-day cycle depending on credit quality. Dynamic discounting typically offers APR of 0.5-36% (graduated by days early). Cantarell OS’s marketplace uses a lowest-bidder model where multiple funders compete, driving rates down by an average of 25 basis points.

Cantarell OS builds your credit profile automatically from platform activity (payments, orders, compliance history). Once your score reaches 600+, you’re eligible for factoring. 700+ unlocks working capital lines of $15K-$35K per transaction. No external credit bureau required.