As global trade adapts to ongoing uncertainty, companies are rethinking supply chains and working capital. The team at Santander Corporate & Investment Banking is helping clients shift from cost efficiency to resilience with tailored financial solutions and strategic support.
Global trade is undergoing a structural shift. Amidst geopolitical tensions, material shortages and trade restrictions, a need to rethink supply chains has arisen. What was once a focus on cost efficiency has shifted to one of resilience, flexibility and risk mitigation, as companies face increased complexity, including shifting trade corridors, changing counterparties and heightened uncertainty.
Many companies adopted a cautious ‘wait and see’ approach in Q1, not making any major decisions on restructuring supply chains or amending their strategies – often citing the ongoing uncertainty or retaining an optimistic view that things will return to a near-normal state. However, with persistent disruption and rising risk aversion, more companies are being driven to make changes, rethinking their supply chains and working capital strategies in profound ways.
“We are seeing increased prioritisation of supply chain security and resilience,” says Enrique Rico, global head of trade and working capital at Santander Corporate & Investment Banking (CIB).
“It’s no longer about what will be the cheapest source of supply, but about how clients can have a more resilient supply chain. For example, CEOs – rather than procurement officers – are now thinking about how to ensure they have several suppliers in case one stops shipping or it suddenly becomes a lot more expensive to ship.”
The Santander CIB trade and working capital business, which Rico leads, is a team positioned to bring clients a blend of deep sector expertise, market-leading working capital platforms, customised, insight-led solutions and global presence and infrastructure.
Santander CIB has seen increased client actions in recent months that cluster into three main areas:
- Ensuring optimised, diversified funding structures – Firms are establishing/increasing working capital facilities as an additional, diversified source of liquidity.
- Enhancing supply chain resilience – Corporates are ensuring security and resilience are prioritised in increasingly diversified supply chains to mitigate the impact of any further shocks. Inventory stocks are also being increased – commonly supported by inventory finance programmes.
- Forging new commercial relationships – Corporates are forging new supplier and customer relationships, seeking to diversify their supply and customer base. This includes entering new sales markets or adding duplicate suppliers.
At Santander CIB, we have seen a significant uptick in the use of receivables finance programmes to drive an alternative, flexible source of liquidity.
Inventory finance has also seen a notable surge in demand amid ongoing uncertainty, as companies shift from ‘just-in-time’ to ‘just-in-case’ strategies. The ability to hold buffer stock placing strain on the balance sheet has become especially relevant in today’s risk-conscious environment.
Finally, as new supplier and customer relationships are established, solutions including documentary trade, prepayments, structured trade solutions, receivables finance, supply chain finance and ‘buy now, pay later’ are all becoming increasingly relevant.
Linked to this, companies are demanding more sophisticated solutions – from bridging working capital gaps to supporting alternative sourcing strategies and managing new types of risk.
The prevailing uncertainty and heightened risk aversion are also influencing working capital provider selection – more clients are shifting towards bank-led programmes managed by stable institutions within their existing banking groups.
Santander has remained a committed trade finance provider to our clients during periods of turbulence, including financial crises and other market disruptions. We pride ourselves on building long-term partnerships with our clients.
For example, during the Covid-19 pandemic, Santander delivered SCF programmes to clients in critical industries within timeframes never before seen in the trade and working capital space.
To dive deeper into one aspect of these recent changes, the macro environment has accelerated a major shift in inventory strategy. Just-in-case inventory management is now considered essential, prioritising supply chain resilience over lean efficiency. While such strategies help mitigate supply risks and provide protection against disruptions, they also increase working capital requirements and liquidity pressures.
To help clients meet this challenge, Santander CIB partnered with Pemberton Asset Management to launch a strategic joint venture. Invensa, a global inventory management and financing platform, doesn’t just fund stock; it integrates into the client’s supply chain, providing innovative inventory management solutions tailored to both the client’s existing supply chain and the evolving needs of companies worldwide.
“Inventory finance is becoming more relevant,” says Rico. “I am sure that a lot of clients would love to have inventory finance programmes in place in the current situation, to be able to ship much quicker without impacting balance sheets or liquidity.
“Uncertainty and volatility are here to stay, so the number of clients looking to have these solutions has increased – the launch of Invensa exceeded even my most optimistic expectations. We are helping a lot of clients with a unique and impressive proposition.”
Santander CIB’s trade and working capital solutions and platforms like Invensa are designed to go beyond providing financing and risk mitigation. They aim to deliver innovative tools that support the entire value chain: not just funding transactions, but enabling scalable, agile solutions that reinforce resilient supply chains and empower clients’ strategic decisions.
Real-world impact: Inventory finance in action
As an example, a top-tier soft commodities company was grappling with volatile input prices and unpredictable demand. To address these challenges, Santander CIB provided a strategic inventory financing solution that enabled the client to secure a steady supply of essential raw materials.
While the company needed to maintain a safety stock, bulk purchasing required substantial upfront capital, putting pressure on short-term liquidity.
The inventory finance solution allowed them to navigate these constraints effectively – improving days inventory outstanding, reducing net leverage and ultimately strengthening their overall financial position without disrupting supply continuity.
Why Santander Corporate & Investment Banking?
As one of the world’s leading banking groups, Santander combines deep sector expertise with market-leading working capital platforms, tailored, insight-driven solutions, and a strong global presence.
Santander CIB’s strength lies not only in its products, but in its ability to offer strategic guidance grounded in a deep understanding of global markets. With a proven track record in trade and working capital, and an extensive portfolio of bespoke programmes, our team is well-positioned to deliver meaningful insights. Each solution is carefully customised to the client’s specific needs, drawing on Santander’s global infrastructure and proprietary platforms to deliver lasting impact.
Looking ahead
Supply chain disruption is no longer a short-term challenge – it has become the new normal in global trade.
In this environment of constant change, Santander CIB is working with clients as a strategic trade and working capital partner.
Backed by financial strength, innovative solutions, deep sector expertise, global reach and digital capabilities, we are ready to support clients through whatever comes next.
