A/R Financing – Metal Telecommunications Structures

Product Line: Factoring Line
Funding Line Amount: $1,200,000
Company Type: Metal Telecommunications Structures
Industry Type:  Telecommunications
Net revenue: $2.9MM (full year 2018)
Location: Peru



Industry
Our client is a Peruvian company that manufactures metal components, such as outdoor cabinets, cable trays, cable ladders, racks, shelves and electrical power boards, to the telecommunications industry.  It offers high-quality products and professional service to its customers. Its biggest source of revenue comes from the shelving. Peru’s telecommunications market has grown significantly over the past few years, with heavy concentration in urban areas.

  

Challenge
The company has been in business since 2007.  Its payment terms are long at 120 days and its revenue decreased almost -13% from 2017.  This decline in sales was largely due to Peru’s political climate following the resignation of its president, which caused many telecommunications investment projects to be stalled.  In 2019, however, those projects resumed and the company received and fulfilled a new $1MM order and is working on another $1.4MM order from the same client. Net margin also decreased due to an increase in sales and administration expenses.

 

Solution
The company has over 10 years of experience and a solid performance record.  One of its proposed debtors is a large company which is very well-positioned in the market as one of the top 2 telecom providers in Latin America and has shown positive payment history on its invoices.  The telecommunications market in Peru is strong, growing and exhibits a great deal of potential.

 

Benefit
Based on the strength of the industry, the company’s successful track record and the fact that its client is one of the top industry players, ExpoCredit was able to approve the company’s request for a factoring line.  However, this is contingent upon seeing 3 months of payment activity with one of its newer debtors to ensure we will have a positive payment experience.

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