Demand for factoring services would grow up to 30% during the Christmas season

Between January and August of this year, A total of 909,777 negotiable invoices were accumulated, which represents an increase of 28.2% compared to the same period in 2022. Thus, 17,683 companies negotiated factoring operations in the country and, of them, 79.4% were small and medium. This segment contributed S/23,589 million to the total value of these, experiencing a growth of 29.7% compared to the same period last year, according to data from the National Productive Diversification Program (PNDP).

In accordance with Klimba Latin American fintech with a presence in Peru and Mexico, for this Christmas campaign the demand for factoring services will grow by 30% compared to the previous year.

The company mentions that this is the time of year in which small and medium-sized business owners prepare to have a successful Christmas campaign, so They need access to liquidity to meet the demand for products and services.

“One of the most common problems for micro, small and medium-sized businesses is the difficulty of accessing fair and, above all, fast financing to improve or strengthen their businesses. In this scenario, factoring appears as an agile financing mechanism aimed at those who are willing to advance the collection of their invoices to obtain liquidity quickly,” he explained. Alvaro Echeverria, CEO of Klimb.

The firm indicated that among the sectors and industries that most demand the factoring service in Peru arefood and groceries, agriculture and fishing, materials and supplies, restaurants and entertainment. The first because since the state of emergency they are the support of the basic family basket. The others were hit harder by the economy and their demand is related to keeping their business going.

The Klimb representative also pointed out that, to date, in Peru the company has more than 6,500 investors, financing more than 1,500 companies. “Our response time is on average 24 to 48 hours maximum, which represents a great advantage for SMEs that require access to financing in an agile and fast manner for their different commitments. We also help medium and large companies with financing through accounts to pay suppliers,” explained Echeverria.

What are the advantages of factoring?

Next, the Klimb CEO provides some benefits of obtaining financing through factoring:

• More sales, more financing: It is a source of financing that grows with sales. As they increase, there is also more cash available for your use, allowing you to constantly meet demand.
• No debt incurred: Factoring is not a loan and therefore does not generate any debt in the banking or financial system. This makes balance sheets look good, making it easier to obtain other types of financing.
• Easy and practical: The application required to establish a factoring relationship is much simpler than other types of financing. No tax returns, financial statements, business plans or projections are needed.
• Credit evaluation: This evaluation, which is made by a factoring or factoring company, is based on the debtor, that is, the company that will pay the invoice. Therefore, it is a very good financing method for new or small SMEs that do not have much financial history.