SCFCAP can significantly reduce the weighted cost of finance for portfolio companies of a Private Equity firm in three important ways:

a. Replace Debt: Replace on-balance sheet debt with less expensive off-balance sheet working capital replacement (e.g. Synthetic Payables) which is less expensive than junior debt.

b. Portfolio Effect: Create new sources of capital for non-credit worthy portfolio companies through 'Portfolio Effect' credit enhancement via bundling together companies payables (to credit enhance all of them by a number of notches) and then wrapping this debt with credit insurance in order to create an investment grade instrument that is much less expensive than trying to finance any single company.

c. Increase Margin: Simultaneously allow improved margins (through capturing EPD) and extend working capital.