Odyssey supply chain credit: Similarities and differences between procurement and construction credit
Equipment typically makes up 75-80% of overall solar project costs. Odyssey created both construction and procurement credit to help solar companies manage working capital challenges related to equipment procurement, ensuring that projects can be done on time and that solar companies don’t need to run cash-flow negative for any period of time during project delivery. To access supply chain credit, solar companies onboard to the Odyssey platform to share some details about their company and project then put down a small deposit. Odyssey will then procure equipment on their behalf, accepting repayment in-line with end-client payment milestones.
Odyssey’s supply chain credit for solar companies comes in two forms: procurement credit and construction credit. Let’s take a look at their similarities and differences.
Timeframe:
Procurement credit is shorter-term, matching the equipment procurement timeline (order, production, delivery). Construction credit can be repaid anytime during project delivery and up to a year after the equipment is procured.
Repayment structure:
Procurement credit is settled on the collection/delivery of the equipment. Construction credit repayments are tied to your project's receivables and in-line with your project payment milestones.
Security:
Both procurement credit and construction credit are collateral-free. For procurement credit, the main security is the equipment so it is important that the equipment is widely used and retains its value over the period of credit. For construction credit Odyssey seeks additional information on construction capability and requires escrow on project payment milestones.
Impact on cash flow:
Both procurement and construction credit address your project funding gaps and dilute cashflow constraints associated with equipment procurement. They conveniently align your credit obligations with your project receivables, ensuring positive cashflows across your portfolio of projects.
Learn more about, and apply for, supply chain credit here.
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