Baltic companies want to receive payment for goods and services as soon as possible

This year, according to data from “Swedish bank“for factoring indicators.

The amount of factoring (which is the collection of the loan for invoices issued pending payment of invoices) this year increased by 68%, reaching a new record: at the end of September it was 117 million euros. The data collected by “Swedbank” show that this year, with the help of factoring, customer invoices worth 46 million euros were financed on average every month.

“It can be seen that customers are very actively increasing their factoring limits. There are various reasons for the increase in factoring. For some, this can be explained by rising inflation and the need to get paid for the goods. delivered as soon as possible, while for others, this is a time to learn about new markets.The buyers of their suppliers are demanding longer and longer payment terms for their invoices, which means that the need for suppliers of goods and services is increasing. get financing before the bills are paid. However, in some cases, entrepreneurs want to get working capital as soon as possible in order to invest in further development, “says Arnis Ārmanis, head of sales at Swedbank’s Baltic Factoring.

Another aspect that is gaining more and more interest from customers this year is factoring with insurance. Apparently, fearing the risk that buyers may have creditworthiness difficulties, suppliers are increasingly deciding to ensure payment of invoices.

Looking at the factoring structure, the volume of reverse factoring transactions (financing the payment of supplier invoices) for grain trading companies has increased significantly this year. Invoices amounting to € 46 million were financed this year alone.

“Compared to the other Baltic states, we can see that the most active are the Lithuanian companies, whose total amount of factoring at the end of last year was close to 600 million euros. Estonian companies used factoring for a total of 448 million. euros, while Latvian businessmen used double – for 214 million euros. This confirms once again the fact that Latvian businessmen rarely take advantage of opportunities to obtain financing for working capital, which could be used faster for the procurement of new raw materials or the financing of new projects, ”says Armanis.