Abstract: Reverse factoring solves the seller's financing difficulty by using the good reputation of the buyer. In practice, core enterprises such as Carrefour China carry out a strategic cooperation on reverse factoring with financial institutions to ease the plight of suppliers and reduce the risk of supply disruptions.Previous studies usually explore the impact of reverse factoring on supply-side operational decisions which are finance-oriented.However, as a buyer-driven financing mode, will the relationship between the upstream and downstream affect the supply chain decision-making in reverse factoring?In addition, for commercial credits turning into bank credits, the core enterprises does not get financing but their credit risk increases in the reverse factoring. So what is the motivates of core enterprise to lead reverse factoring? In this paper, a two-level supply chain consisting of a supplier and a retailer facing stochastic demand is studied,and a game model is established based on the wholesale price contract to explore the operating rules of financing-constrained supply chain under reverse factoring. The credit risk loss coefficient A/l (where A represents the credit risk of the supplier and l represents the total amount of credit of retailer). They are introduced to describe the credit losses suffered by retailers because of credit transfer.By solving the Stackelberg game model inversely, the quantitative decision of reverse factoring in supply chain is obtained:When η ≥ Q_N^*c, the supply chain has sufficient funds and the optimal order quantity is Q_N^*. When η < Q_N^*c, supplier's funding constraints, in this situation, when ,supply chain is not necessary to reverse factoring, the optimal order quantity is η/c;and when , reverse factoring is the best choice and the optimal order quantity is Q₂^*.Combined with numerical simulation, it is found that reverse factoring can enhance supply chain cooperation and plays an important role in increasing the supply chain participants' income, enhancing the stability of supply chain operations and the ability of supply chain to capture market opportunities. Furthermore, it is revealed that retailers can benefit more from reverse factoring,which explains the motivation of buyer-driven financing from the perspective of supply chain performance, and provides new support for the opinion of financial strengthening supply chain cooperation.

Key words: reverse factoring, supply chain cooperation, capital constrains, credit loss risk