Analysis of the Cost and Benefit of the Combination Product of Chattel Financing and Factoring

Abstract

First we introduced business processes of the chattel financing and factoring financing mix. Then we built a model of costs and benefits from the perspective of banks and SMEs, and discussed the main factors affecting net profits of both supply and demand in the supply chain finance portfolio of products. At the same time we compared the difference from net profits of both supply and demand in the supply chain finance portfolio of products, finding that the bank's net income is higher than the combination of a single supply chain finance product, but depending on the gap between potential shortage costs of a single product chattel and the financing costs plus insurance costs. Finally, we made use of dynamic game theory and game equilibrium point between the two sides, and assisted in decision-making with models.