Unusally, I think Matt Levine's explanation is confusing. > Big companies buy stuff from smaller companies, and have to pay for the stuff within, say, 90 days

Unusally, I think Matt Levine's explanation is confusing. > Big companies buy stuff from smaller companies, and have to pay for the stuff within, say, 90 days after delivery. Greensill pays the suppliers, say, 30 days after delivery, but at a discount; the big company now owes the payment to Greensill. It pays the full amount, to Greensill, 90 days after delivery. Greensill has effectively loaned money to the big company; the difference between the discounted price that Greensill pays and the full price it receives is effectively interest on that loan. This seems backwards; the big company isn't borrowing anything. In conventional factoring small companies make these deals to get their cash early, and they give up a percentage as payment. It makes no difference to the big company, which pays the same amount after 90 days either way. Unless... the big company is working with the finance company to actively sell these deals to their suppliers. In which case the big company will be getting a slice of the percentage fee paid by the small company. Levine concludes: > The thing about Greensill’s business is that it doesn’t sound that … hard? Like, once you have introduced a customer to the idea of supply chain finance, I am not sure why the customer should be particularly loyal to you. Anyone who offers a better rate, or the same rate but a better promise not to blow up, should be fine. This emphasises the point that this is normally nothing to do with the big company. The small suppliers can go elsewhere. There's something I'm missing here, and I think Levine is too.