Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (2024)

Welcome to the TFG Supply Chain Finance (SCF) and Payables Finance hub. Find out about how we help corporates and large businesses access supply chain finance programmes, or keep up to date with the latest research, information and insights on supply chain finance.

Access supply chain finance Learn about supply chain finance

What is Supply Chain Finance?

Supply Chain Finance (also known as SCF, payables, reverse factoring and supplier finance), is a cash flow solution which helps businesses free up working capital trapped in global supply chains. Supply Chain Finance has recently been defined as a much broader category of trade financing, encompassing all the financing opportunities across a supply chain. Notwithstanding, the product is still very much seen from a narrower perspective, where its key feature is that it is buyer/debtor driven. In such a case, a buyer approaches its financial provider for the establishment of a receivables discounting line for its suppliers to use and discount the invoices they issued to that buyer.

It is a solution designed to benefit both suppliers and buyers; suppliers get paid early and buyers can extend their payment terms. This solution allows businesses which import goods to unlock working capital as well as reduce the risk associated with buying goods in bulk and/or transporting them globally. SCF is generally defined as ‘an arrangement whereby a buyer agrees to approve his suppliers’ invoices for financing by a bank or other financier’.

The termSupply Chain Finance (SCF)is often also referred to as

  • Supplier Finance
  • Payables finance
  • Supplier payments
  • Approved payables finance
  • Reverse factoring
  • Confirming

Given that there are no ICC rules for SCF (like there are forLetter of CreditorIncoterms), it’s often up to each provider to decide what they call it.

Despite the publishing of the ‘Standard Definitions for Techniques of Supply Chain Finance‘ by the International Chamber of Commerce in 2016, the definition is not yet widely adopted and providers of SCF often use various terms to describe their product offerings.

Receivables finance on the other hand, is well defined as ‘the purchasing of receivables or invoices from a seller, with or without recourse’.

In order to address some of the common issues and misunderstandings around SCF, we have put together this short guide.

Diagram: How does Supply Chain Finance work?

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (1)

How can Supply Chain Finance benefit my business?

SCF is a very efficient way to underpin the stability of a Buyer’s supply chain and market reach vis-a-vis its suppliers, allowing it to benefit from better credit terms and streamlined invoice payment procedures (supply chain finance tends to be made available through online platforms). It is also very beneficial to suppliers, as it allows them to shorten their receivables cycle and therefore reinvest their operational cash-flow at a faster pace. The advantages also tend to include financing in better terms for both parties, as suppliers don’t need to take out financing under their own credit lines and may benefit from their clients’ access to credit at lower rates, and buyers may get credit from their suppliers at a lower cost than that of taking out a loan.

Benefits to buyers/ importers

  • Buyers can maintain a healthy balance sheet
  • Buyers maintain a good relationship with suppliers
  • Promotes competition/ diversity in suppliers
  • Allows buyers to make purchases in bulk to save costs
  • Buyers can work with complex end-to-end supply chains
  • SCF doesn’t disturb existing bank relationships or overdrafts

Benefits to suppliers/ exporters

  • Suppliers can get paid earlier than their usual 30-day credit terms
  • Little financial risk – insurance is sorted through a supply chain financier
  • Doesn’t cost the supplier any extra
  • Allows supplier to have the cashflow to work on numerous deals simultaneously
  • Helps provide liquidity and reduces financing costs

Get Started

How can we help?

The TFG supply chain finance team works with the key decision-makers at 270+ banks, funds and alternative lenders globally, assisting companies in accessing trade & supply chain finance.

Our international team are here to help you scale up to take advantage of trade opportunities. We have product specialists, from machinery experts to soybean gurus.

Often the financing solution that is required can be complicated, and our job is to help you find the appropriate trade finance solutions for your business.

Read more about Trade Finance Global and our global team.

Contact Information

If you have a supply chain finance enquiry, please use the contact form.

Otherwise, you can reach us on the email addresses below.

Trade Finance Global
201 Haverstock Hill
Second Floor
London
NW3 4QG

Telephone:+44 (0) 2071181027

Finance Queries:

scf.team@tradefinanceglobal.com

invoice.team@tradefinanceglobal.com

trade.team@tradefinanceglobal.com

introducers@tradefinanceglobal.com

Supply Chain Finance Enquiries

Want to learn more about Supply Chain Finance?

Look no further. We’ve put together our feature trade finance insights, research and articles, and you can catch the latest thought leadership from the TFG, listen to podcasts and digest the latest in international trade right here.

From the Editor – Supply Chain and Payables Finance Insights

Emerging markets roundtable: understanding and addressing the trade finance challenges for SMEs This year’s ITFA 48th Annual Trade & Forfaiting conference, held in Porto, covered a few key themes, one of the most notable being the increasing trade finance gap, which impacts small- to medium-sized enterprises (SMEs) in emerging markets the most.

Ameriabank on international trade, sustainability, digitisation in Armenia Trade Finance Global (TFG) sat down with Ameriabank to discuss how shifts in the global trading ecosystem have affected the Armenian economy.

TFG partners with UKEF and DIT to create a trade and export finance guide Trade Finance Global has partnered with UKEF, the UK government’s export credit agency, and DIT to produce the UK Trade & Export Finance Guide.

Latest SCF Insights >>

Emerging markets roundtable: understanding and addressing the trade finance challenges for SMEs

Ameriabank on international trade, sustainability, digitisation in Armenia

TFG partners with UKEF and DIT to create a trade and export finance guide

Podcast: Olá, Porto! ITFA’s Sean Edwards on emerging markets and digitisation

World of Open Account (WOA) cofounders on the changing face of receivables finance

Fork in the road: A look back at the strategic rationale behind China’s Belt and Road Initiative

Videos – Supply Chain Finance

RELEASED: TFG’s full trade finance video series in partnership with ITFA

VIDEO: Factoring strikes back – FCI’s Aysen Çetintas on expanding trade finance education after COVID-19

VIDEO: Steady, dynamic growth – Santander’s Bertrand de Comminges on why corporates are moving into supply chain finance

VIDEO: Post-mortem analysis on Greensill and other cases studies

VIDEO: ‘No turning back’ – Bank of America’s Baris Kalay on trade digitalisation after COVID-19

VIDEO: On the red carpet – ITFA Chairman Sean Edwards on changes in global trade finance after COVID-19

Supply Chain Finance Podcasts

Supply Chain Finance – Frequently Asked Questions

Who can use Supply Chain Finance?

Currently, supply chain finance programmes exist predominantly in Western European and US markets, but Asian markets are quickly following suite, particularly India and China. Chief Financial Officers are beginning to include supply chain finance as part of their working capital and treasury agendas. Despite being around for over 70 years, supply chain finance is now being transformed by digital innovation. Proprietary software and technology platforms work with banks to automate and provide instant rates and terms which suit both parties. Payables data will typically get uploaded to a supplier platform and suppliers can immediately approve invoices and see invoices before they mature.

Supply chain finance is great for large corporations or SME suppliers/ buyers. Whether you’re looking to import automotives and vehicles or retail stock such as clothing, supply chain finance is an innovative solution which the UK government fully supports and encourages.

How can Trade Finance Global help your business access supply chain finance?

At Trade Finance Global, we are experts in providing insight on global supply chain and trade finance. In addition, we have a network of expert funders and advisors who have helped SMEs and businesses access finance to import and export goods or services worldwide. We work with you to find out what your business requires.

Our specialists work with leading funders and banks to offer you the most competitive rates; simply get in touch using the contact form below, and briefly let us know what you’re looking for. Alternatively, find out more about supply chain finance by reading some of the articles we have put together above.

How does Supply Chain Finance work?

  1. A Supply Chain Finance facility is entered by the buyer, financier and supplier
  2. Goods are shipped and sales invoice is raised on the buyer by the supplier
  3. Supplier submits invoice to financier’s supply chain finance platform
  4. Buyer approves the invoice on the financier’s supply chain finance platform
  5. The financier pays the supplier, excluding interest and fees.
  6. The financier debits the account of the buyer on the maturity of the invoice

Strategic Partners:

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (17)

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (18)

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (19)

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (20)

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (21)

Supply Chain Finance | 2022 Supply Chain Finance (SCF) Guide (2024)

FAQs

What is SCF system? ›

Supply chain finance (SCF) is a term describing a set of technology-based solutions that aim to lower financing costs and improve business efficiency for buyers and sellers linked in a sales transaction.

What is SCF in banking? ›

Supply Chain Finance (SCF) The SCF business of ADB's Trade and Supply Chain Finance Program (TSCFP) aims to reduce financing gaps faced by small- and medium-sized enterprises (SMEs) to help them become part of the global trading system.

Is supply chain finance the same as trade finance? ›

Trade finance is sometimes confused with supply chain finance, and it's an easy mistake because trade finance helps you fund the beginning of your supply chain. However, supply chain finance is a different type of business lending that buyers offer to their suppliers and doesn't apply here.

What is SCF fund? ›

Strategic Climate Fund (SCF)

Climate Investment Funds comprises two funds, the Clean Technology Fund and the Strategic Climate Fund. The Strategic Climate Fund provides financing to pilot innovative approaches or to scale-up activities aimed at specific climate change challenges or sectoral responses.

How is SCF calculated? ›

The highest common factor is found by multiplying all the factors which appear in both lists: So the HCF of 60 and 72 is 2 × 2 × 3 which is 12. The lowest common multiple is found by multiplying all the factors which appear in either list: So the LCM of 60 and 72 is 2 × 2 × 2 × 3 × 3 × 5 which is 360.

Why is SCF important? ›

SCF complex, a core member of UPS, plays an important role in nearly all aspects of human reproduction. SCF is involved in the ubiquitination of key proteins in cell cycle, cell proliferation and differentiation, EMT, cell signal transduction, etc.

What is SCF in procurement? ›

Supply Chain Finance commonly known as (SCF) is a type of supplier finance which enables the supplier to cash his receivables early than the actual payment date, thereby freeing up its working capital.

Is supply chain finance a loan? ›

All of these types of funding help businesses manage cash flow but there are important differences between them. Supply chain finance is not a loan. There is no financial debt. Rather, it's an extension of the buyer's accounts payable.

How do I start a supply chain finance company? ›

If implemented well, it can provide sustainable long-term value for both buyer and their suppliers.
...
5 Moves to Set Up a Supply Chain Finance Program
  1. Establish the business case. ...
  2. Ensure alignment. ...
  3. Select SCF provider(s) ...
  4. Introduce the program to selected suppliers. ...
  5. Expand and regularly refresh the program.

What are the risks in supply chain finance? ›

What is financial risk in a supply chain?
  • Supplier bankruptcy.
  • Market volatility.
  • Foreign exchange.
  • Budget overruns.
  • Inflation.
  • Legal issues.
  • Reputational damage.
  • Operational incidents.
8 Jun 2022

How does supply chain finance make money? ›

Supply chain finance, also known as supplier finance or reverse factoring, is a set of solutions that optimizes cash flow by allowing businesses to lengthen their payment terms to their suppliers while providing the option for their large and SME suppliers to get paid early.

Which industries use supply chain finance? ›

Large manufacturers, such as airplane manufacturer Boeing Co., and other global companies, including soft drinks producer Keurig Dr Pepper Inc., are avid users of supply-chain financing to extend payment terms. But there tends to be a barrier to entry for some businesses, especially those with weaker credit ratings.

WHO launched SCF? ›

Q. Which institution has launched the 'Swavalamban Challenge Fund (SCF)'? Notes: Small Industries Development Bank of India (SIDBI) has launched the second window of Swavalamban Challenge Fund (SCF). The theme of the fund is 'Green Bharat'.

Who are SCF Partners? ›

Founded in 1989, SCF Partners (“SCF”) provides equity capital and strategic growth assistance to build leading energy service and equipment companies that operate throughout the world. The firm is headquartered in Houston, Texas and has additional offices in Calgary, Singapore and Aberdeen.

What is a SCS fund? ›

SCS Financial is an ultra-high-net-worth advisor and hedge fund-of-fund manager. SCS serves families, family offices and institutional investors through a conflict-free, open architecture business model. The company is based in Boston and was founded in 2002 by five partners, including Pete Mattoon, the company's CEO.

What is SCF cycle? ›

Skp, Cullin, F-box containing complex (or SCF complex) is a multi-protein E3 ubiquitin ligase complex that catalyzes the ubiquitination of proteins destined for 26S proteasomal degradation. Along with the anaphase-promoting complex, SCF has important roles in the ubiquitination of proteins involved in the cell cycle.

What is SCF calculation in DFT? ›

Self-consistent field (SCF) methods include both Hartree-Fock (HF) theory and Kohn-Sham (KS) density functional theory (DFT). Self-consistent field theories only depend on the electronic density matrices, and are the simplest level of quantum chemical models.

What is SCF convergence? ›

Oscillating convergence in an SCF calculation is usually an oscillation between wave functions that are close to different states or a mixing of states. Thus oscillating convergence can often be helped by level shifting, which artificially raises the energies of the virtual orbitals.

What did SCF used to be called? ›

State College of Florida, Manatee–Sarasota
Other nameSCF
Former namesManatee Junior College Manatee Community College
MottoVeritas Libertas
Motto in English"The Truth Is Freedom"
TypePublic college
14 more rows

Where is SCF found? ›

Mast Cells

Stem cell factor (SCF) is a glycosylated protein with a molecular weight of 2–35 kDa; the main sources of SCF in vivo are fibroblasts and bone marrow stromal cells. SCF exists in membrane-bound and soluble forms, both of which are biologically active.

Is SCF a growth factor? ›

Stem cell factor (SCF, also called Steel factor or Kit ligand) is a growth factor that exists both as a membrane-bound and soluble form.

Who is anchor in SCF? ›

Buyer (Anchor) raises an indent/PO on the Supplier (Vendor) requesting a consignment of goods. The Supplier (Vendor) ships the goods & raises invoice on the Buyer (Anchor). The Buyer (Anchor) raises funding request on Bank's portal based on accepted invoice.

What is supply chain in simple words? ›

A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user.

Who benefits from supply chain financing? ›

The benefits of supply chain finance

At the heart of any good SCF program is the ability to balance your working capital needs with those of your suppliers. It offers benefits to both buyers and suppliers.

How much does supply chain finance cost? ›

Supply chain finance: Interest rates and fees

Generally, lenders offer supply chain financing at a percentage that has been predetermined wrt the invoice value and can vary between 80% – 90%. The facilities for invoice discounting commonly vary between 4.5% – 8.5%.

How is supply chain finance different from factoring? ›

It is a kind of invoice factoring, but in contrast to basic factoring, in supply chain finance the initiative is not by the supplier, who would have presented their invoices to the factor to be paid earlier under basic factoring.

What are the 3 basic entities of supply chain? ›

The supply chain exists in many different forms, but the most common structure contains four separate entities:
  • Suppliers. These entities provide the materials needed to create the product, whether they're raw materials or individual parts to a finished product. ...
  • Manufacturers. ...
  • Distributors. ...
  • Customers.
19 Sept 2022

What are the 5 basic steps of supply chain management? ›

Supply management is made up of five areas: supply planning, production planning, inventory planning, capacity planning, and distribution planning.

Is supply chain a hard career? ›

Supply chain and logistics management is a demanding career. But it's also one of the most exciting areas of growth for hungry, driven professionals who are looking to make a real impact in their jobs.

What are the 5 biggest supply chain issues? ›

Shippers' Top 5 Supply Chain Challenges:
  • Keeping transportation costs down.
  • Keeping up with customer/industry demands.
  • Sourcing consistent, reliable carrier capacity.
  • Keeping up with the latest technology solutions and demands.
  • On-time pickup and delivery performance.
30 Sept 2022

What are the 4 types of financial risk? ›

There are many ways to categorize a company's financial risks. One approach for this is provided by separating financial risk into four broad categories: market risk, credit risk, liquidity risk, and operational risk.

What are the four 4 main elements of a supply chain? ›

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

What are the top 3 elements of supply chain? ›

Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery). Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are.

What is the highest paying job in supply chain? ›

The 10 High-Paying Careers for Supply Chain Management Majors are:
  • Logistics Manager $104,827.
  • Supply Chain Manager $104,071.
  • Global Commodities Director $103,601.
  • Purchasing Manager $103,289.
  • Strategic Sourcing Manager $100,015.
  • Procurement Manager $95,285.
  • Production Manager $94,248.
  • Facilities Manager $91,728.

Is supply chain a stressful job? ›

Supply chain management can be rewarding, but it isn't for everybody. SCM professionals typically work long hours under heavy stress. Problems arise quickly and unexpectedly and demand immediate solutions—think resolving a last-minute shipping issue halfway across the world in the middle of the night.

What are the 5 types of supply chain? ›

Here are six types of supply chain models that can drive supply chain management for a business:
  • Continuous Flow. This is one of the most traditional models on the list. ...
  • Fast chain. The fast chain model is one of the new names in supply chain strategies. ...
  • Efficient Chain. ...
  • Agile. ...
  • Custom-configured. ...
  • Flexible.
10 May 2022

What are six key supply chains? ›

These drivers are; Facilities, Inventory, Transportation, Information, Sourcing and pricing.

What are the 3 types of supply chain strategies? ›

3 supply chain strategies for small businesses
  • Demand-driven supply chain strategy. A demand-driven supply chain focuses on meeting demand from the consumer. ...
  • Agile supply chain strategy. ...
  • Collaborative supply chain strategy.
21 Jan 2022

Which Organisation has launched the second window of SCF? ›

Small Industries Development Bank of India (Sidbi) on Monday said it has launched the second window of Swavalamban Challenge Fund (SCF) with Green Bharat as prioritised theme.

What is swavalamban Challenge Fund? ›

SIDBI launches Swavalamban Challenge Fund to promote entrepreneurship culture in India - Small Industries Development Bank of India.

What is mission swavalamban? ›

SIDBI imbibed actions under Mission Swavalamban, an umbrella program to integrate and coordinate all actions for a holistic development of entrepreneurship in the country. The initiatives under Mission Swavalamban were designed to bring changes at grass root level as well as inducing cultural change.

Who owns Charlesbank Capital Partners? ›

Charlesbank's strategy emphasizes investing across a broad range of industries, transaction types and levels of the capital structure.
...
Charlesbank Capital Partners.
TypePrivate Ownership
Key peopleMichael R. Eisenson, Michael Choe
ProductsPrivate equity funds, Leveraged buyouts, Recapitalizations, Growth capital
AUM$5+ Billion
6 more rows

What is an SCS entity? ›

A limited partnership (société en commandite simple - SCS) is a commercial company. It requires at least two partners, one of which is a general partner and the other, a limited partner. The difference between the 2 partners lies in the nature of their liability.

Who can invest in SIF? ›

An institutional investor; A professional investor; Any other investors who confirmed in writing that they are "well-informed investors" and either invest a minimum of €125,000 in the SIF or have an appraisal by a credit institution, an investment firm or a management company.

What is an ABC fund? ›

The ABC Fund provides loans and equity investments adapted to the needs of rural SMEs, farmers' organizations, agri-preneurs and rural financial institutions. It particularly targets commercially viable ventures that can help create employment, in particular for youth and women, and improve rural livelihoods.

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SCF Overview

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https://docs.oracle.com › OBSCF14.3.0.0.0 › Topics › SC...
Supply Chain Finance. Overview. Supply Chain Finance commonly known as (SCF) is a type of supplier finance which enables the supplier to cash his receivables ea...
SCF is a set of collaborative financing solutions for all supply chain partners. Learn more about benefits, risks, sustainability and individual products.
What is Supply Chain Financing? SCF is a way to optimize working capital and reduce supply chain risk; SCF allows businesses to increase supplier payment terms ...

What does SCF stand for in radiotherapy? ›

Abstract. Aims: Supraclavicular fossa (SCF) radiotherapy plays an important part in the adjuvant management of breast cancer but data on acute radiotherapy toxicity are lacking, particularly when differing patient treatment positions are used to allow computed tomography planning or to reduce cardiac doses.

What is SCF in cell cycle? ›

Skp, Cullin, F-box containing complex (or SCF complex) is a multi-protein E3 ubiquitin ligase complex that catalyzes the ubiquitination of proteins destined for 26S proteasomal degradation. Along with the anaphase-promoting complex, SCF has important roles in the ubiquitination of proteins involved in the cell cycle.

What does SCF stand for in cell biology? ›

Stem cell factor (also known as SCF, KIT-ligand, KL, or steel factor) is a cytokine that binds to the c-KIT receptor (CD117). SCF can exist both as a transmembrane protein and a soluble protein. This cytokine plays an important role in hematopoiesis (formation of blood cells), spermatogenesis, and melanogenesis.

What is SCF in computational chemistry? ›

Self-consistent field (SCF) methods include both Hartree-Fock (HF) theory and Kohn-Sham (KS) density functional theory (DFT). Self-consistent field theories only depend on the electronic density matrices, and are the simplest level of quantum chemical models.

What is the full form of SCF? ›

SCF - Standard Cubic Feet. SCF - Standard Charge Factor. SCF - Spacecraft Control Facility. SCF - Sequenced Compatibility Firing. SCF - Satellite Control Facility.

What does SCF mean in engineering? ›

An SCF can be defined as the ratio of the hot-spot stress range over the nominal stress range. From: Marine Structural Design (Second Edition), 2016.

What is CMF treatment? ›

A chemotherapy regimen consisting of cyclophosphamide, methotrexate, and fluorouracil, which may be used in the adjuvant setting for the treatment of nonmetastatic breast cancer or alone for the treatment of metastatic breast cancer.

What is targeted by the SCF complex? ›

The SKP1, CUL1, F-box protein (SCF) complex encompasses a group of 69 SCF E3 ubiquitin ligase complexes that primarily modify protein substrates with poly-ubiquitin chains to target them for proteasomal degradation.

Is SCF an enzyme? ›

The SCF complexes are constitutively active enzymes that recognize and ubiquitinate only phosphorylated substrates (Kornitzer and Ciechanover, 2000). Consequently, this system links protein phosphorylation to proteolytic degradation by the 26S proteasome (Cardozo and Pagano, 2004).

During which part of the cell cycle are SCF complexes active? ›

The SCF(SKP2) acts in early interphase, being activated in late G1—after a decrease in Cdh1 activity—and targeting cell cycle inhibitors promoting cell cycle progression [34, 35]. One of its targets is p27, an inhibitor of cyclin E-Cdk2 complex.

Where is SCF found? ›

Mast Cells

Stem cell factor (SCF) is a glycosylated protein with a molecular weight of 2–35 kDa; the main sources of SCF in vivo are fibroblasts and bone marrow stromal cells. SCF exists in membrane-bound and soluble forms, both of which are biologically active.

What is Delta SCF method? ›

The Delta SCF approximation is a density-functional method closely resembling standard density-functional theory (DFT), the only difference being that in Delta SCF one or more electrons are placed in higher lying Kohn-Sham orbitals instead of placing all electrons in the lowest possible orbitals as one does when ...

What is SCF convergence? ›

Oscillating convergence in an SCF calculation is usually an oscillation between wave functions that are close to different states or a mixing of states. Thus oscillating convergence can often be helped by level shifting, which artificially raises the energies of the virtual orbitals.

Is Hartree-Fock still used? ›

The Hartree–Fock method finds its typical application in the solution of the Schrödinger equation for atoms, molecules, nanostructures and solids but it has also found widespread use in nuclear physics.

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