General Motors Co and Ford Motor Co are using fast-payment programs set up with financial lenders to help cash-strapped small suppliers survive production shutdowns caused by the coronavirus pandemic.
Under the deal, a supplier gets an earlier payment from Wells Fargo for the full invoice, after paying a financing fee. GM later pays Wells Fargo the full amount.GM said the cost of financing under its program is linked to the automaker’s credit rating and not the supplier’s, allowing the smaller companies to leverage GM’s financial strength and achieve lower costs. It did not disclose other financial details.
Some supplier executives and analysts compared the potential cost of taking accelerated payments to credit-card debt. Some of these programs can cost more than a line of credit with interest rates in some cases running as high as 3% to 4% per 30 days. The pressure on suppliers may only increase in the third quarter as banks pull back on making loans, Eisenberg said. “If we have this second wave in the fall, the access to capital that everyone had in March won’t be the same in September and October.”
“The cost of such deals compared to the cost of being out of business is not really a choice,” he said.
France Dernières Nouvelles, France Actualités
Similar News:Vous pouvez également lire des articles d'actualité similaires à celui-ci que nous avons collectés auprès d'autres sources d'information.
Willow Grylls to Co-Head ‘The Missing’ Producer New PicturesExecutive producer Willow Grylls has been appointed as co-chief executive officer of New Pictures, whose output includes “The Missing” and “Catherine the Great,” working alongside exist…
Lire la suite »
BBC Picks Up Danish Crime Series ‘DNA’ From ‘The Killing’ Co-Creator, Charlotte Rampling Among CastNewen Distribution, the distribution arm of TF1-backed Newen has struck a deal with the BBC for rights to Danish crime series DNA (8×45’), starring Charlotte Rampling. The series comes from To…
Lire la suite »
Another Ford plant temporarily shuts down after an employee tests positive for Covid-19Ford temporarily suspended work at part of its Kansas City assembly plant Tuesday after another employee tested positive for Covid-19
Lire la suite »
Call Her Daddy's Alexandra On Where She Stands With Ex Co-HostCall Her Daddy's Alexandra Cooper cleared the air regarding her and Sofia Franklyn's recent contract feud and set the record straight on where she stands with her former co-host.
Lire la suite »
Watch Hilary Duff & Cheaper By the Dozen Co-Stars Recreate ScenesHilary Duff, Alyson Stoner and more Cheaper By the Dozen stars lend their acting skills and talent for a good cause and a hint of nostalgia
Lire la suite »