The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide US$5mn to Factorline in Chile to support the company’s international factoring expansion and diversify its funding sources.
Factorline, established in 1993, is a leading factoring company that offers domestic and international services to small and medium enterprises in Chile. Factoring entails the purchase of accounts receivable from companies, with the purchasing party managing the loan collections. This financing option provides an efficient tool for working capital management, which is especially useful for growing smaller companies.

Jyrki Koskelo, IFC’s director for global financial markets, says: “By supporting Factorline’s international operations, IFC’s financing will help export-oriented smaller businesses, enabling them to expand their reach in international markets.”

Atul Mehta, IFC’s director for Latin America and the Caribbean, also notes: “This transaction fits with our strategy in Chile to support the local financial sector and foster financial intermediation for the benefit of smaller businesses.”

Factorline has a total portfolio of over US$110mn equivalent and serves about 1,700 clients. The company targets small Chilean businesses that need a faster repayment of their sales receivables in order to finance their working capital needs. It is headquartered in Santiago and has a network of 16 branches across the country.

Factorline is very active in national and international factoring networks, such as Asociacin Chilena de Empresas de Factoring, an organisation working to institutionalise and support the development of the factoring industry in Chile, and Factors Chain International, the largest international association of factoring companies.

Juan Mauricio Fuentes, General Manager of Factorline, notes: “IFC’s financing is critical for supporting our international operations, which are mainly focused on the purchase of accounts receivable from small and medium export-oriented enterprises in Chile. Today, these companies are taking opportunities opened by Chile’s trade agreements with other countries. This growth has created a stronger need for working capital.”