Optimizing SME Financial Performance Through Supply Chain Financing: An Integrated Approach to Working Capital and Cash Flow Management

Large businesses among Small and Medium Enterprises regularly encounter problems financing their development and operational stability. Supply Chain Financing (SCF) provides an innovative fund program which enhances SME financial security by improving cash flow operations and working capital management functions. The research analyzes the financial performance effects of Supply Chain Financing (SCF) as it impacts liquidity measurements together with working capital efficiency and profitability performance along with cash flow stability metrics. The study analyzes barriers to adoption which include staff unawareness about SCF combined with financial institution trust issues and regulatory hurdles and concerns about the additional costs of SCF.The research employed quantitative approaches through the combination of primary and secondary data collection methods. Research authors built a theoretical model that explained SCF adoption effects on financial performance through working capital management and financial intermediation theory. Financial stability increased notably and all risk factors decreased notably through the implementation of Supply Chain Finance (SCF). Traditional financing methods generate better results than supply chain finance when processing efficiency and cost-effectiveness factors are considered.Research into specific SCF applications for various industries should combine analysis of fintech solutions and human behavior patterns that impact SCF adoption. Research outcomes present useful knowledge about SCF implementation that benefits SMEs together with financial institutions and government authorities to establish better financial stability.