Moody’s Raises Concerns Over Lengthening Supply Chain Finance Payment Terms

September 24, 2025 - 21:40

Recent disclosures regarding supply chain finance (SCF) arrangements indicate that numerous US companies are increasingly extending their payment terms, a trend that has drawn caution from Moody’s. The credit rating agency has highlighted the growing risks for investors if these financing programs were to be retracted.

Since late 2023, firms have been mandated to include "roll forward" data in their financial statements concerning supplier finance arrangements. This requirement aims to enhance transparency, yet it also reveals a concerning pattern of companies delaying payments further into the future. Such practices could potentially destabilize the financial health of suppliers who rely on timely payments to maintain operations.

Moody’s has emphasized that these extended payment terms could lead to significant vulnerabilities within the supply chain, raising alarms for stakeholders who depend on the stability and reliability of these financial arrangements. As companies navigate these changing dynamics, careful consideration of the implications for both suppliers and investors is crucial.