The fit with Novicap
The company needs an extensive amount of capital due to the particular nature of its sector. On the one hand, they have to buy all the raw material that they are going to distribute during the rest of the year on a specific date, and on the other hand, their customers purchase their product throughout the year. These include, for example, large distribution chains with a lot of bargaining power to defer payments from 60 to 120 days. On top of this comes the operational complexity of the sector and the high amount of invoices that are issued. This situation has led them to look for a financing alternative that adapts to their operational needs and allows them to improve their cash flow.
The collaboration with Novicap is a long-term partnership, thanks to the willingness of both parties to improve operational efficiency, improve the management of collections and payments and diversify sources of financing outside the banking system. The relationship between the two companies began with a factoring line for the large distribution outlets that are managed by central purchasing departments. It is a multi-purpose line with which it has been able to finance the invoices of customers with higher interest rates in a dynamic manner and at a reasonable price. This has led to the adoption of a Supply Chain Finance line for its suppliers, enabling to improve its future growth prospects and the supplier-customer relationship. According to the company’s CFO:
“Novicap has allowed us access to a new traditional non-bank financing, with new possibilities and financing solutions at a reasonable cost and that is easy to manage”