The international factoring services company “Factris” has introduced a new innovative electronic transaction platform “Finance Automation for Business” (FAB) in the Latvian market. With its help, small and medium-sized entrepreneurs can attract working capital online in a very short time to stabilize cash flow, the company’s representative Dace Plato informed.
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“Many Latvian companies are often hampered by late payments from customers, which do not allow timely payment with suppliers, pay salaries, purchase inventories, etc. The data available to Factris show that the average invoice payment period for companies operating in Latvia is 52 days. construction, building materials and construction equipment sales or rental companies, as well as companies engaged in wholesale or consulting activities.To solve this problem, factoring is increasingly used in the world and also in Latvia, when the factoring company assumes the payment of debts by financing the company’s working capital, “explained the company ‘s representative.
Kaspars Barons, Managing Director of Factris in Latvia, said: “Our observations show that fast access to low-cost working capital is especially important for companies during a pandemic, but such opportunities are very limited. In traditional credit institutions, bureaucratic requirements for financing are increasing and the market is shrinking. banking competition – bank branches are closed, personalized communication with bank customers is restricted, etc. Therefore, the new FAB platform helps small and medium-sized businesses by providing immediate access to financing, which allows you to quickly receive payment for work or services, pay with suppliers, balance cash flow and otherwise balance work. “
The company points out that the new automated platform FAB provides an opportunity not only to apply for fast financing, ensuring an open, in-depth evaluation of all transactions, but also to conveniently manage the financed accounts. By joining the platform, the company has access to all information about its financial portfolio, its use, interest payments, customer payments and overdue invoices. The platform sends automatic e-mail notifications to the company’s debtors with a reminder to pay the bills, which allows the company not to think about customers’ late payments.
The company explained that most factoring or invoice financing services in Latvia are currently used by companies in the wholesale, telecommunications and transport sectors. As K. Barons emphasizes, factoring is a good opportunity to develop business for small and medium-sized enterprises, for the financing of which there are currently relatively few competitive and efficient services in Latvia.
According to the data federation of the European Union Factoring and Commercial Financial Sector, in 2018 the factoring and GDP ratio in Latvia was 3%, while, for example, in Belgium and Cyprus – 17%, Estonia, France – 14, the Netherlands, the United Kingdom – 13, Lithuania – 8 %, the collected information was explained in the company.
Factris was founded in 2017 in Amsterdam. It currently provides factoring services in the Netherlands, Lithuania and Latvia. It has been operating in Latvia since May 2019. During this time, more than 40 customers have been attracted, the amount of financed transactions has reached almost ten million euros, but the company’s growth is 15-20% every month. Factris’ goals in the Latvian market over the next six to seven months are to double its growth rates, and in the next year to triple its share in the Latvian factoring market.
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