19 October 2017
The number of factoring requests from the IT&C field maintains its upward trend
Next Capital registered an increase of over 30% after the first 9 months of 2017 for the volume of receivables managed through factoring services, as compared to the same period in 2016, reaching EUR 16 million in September. The fields that used factoring the most were IT&C, FMCG and the service sector.
Over 90% of the receivable volumes managed by Next Capital were facilitated by the domestic factoring service (with recourse). Approximately 30% of the value of managed receivables came from the IT&C field, followed by the consumer goods fields with 25% and the service field with 18%.
“The IT&C sector continues to grow this year, as well, but the construction sector also registered a positive evolution, reaching a percentage of approximately 15% of the total managed receivables. In total, the increase that we experienced is due to extending the client portfolio on the one hand and to an increased demand from our existing Clients, especially in the context of an increase of their turnover, on the other. Longer payment terms, specific to certain activity sectors, put great pressure on cash-flows and the handiest solution is extending the factoring facilities”, states Bogdan Rosu, Manager of Next Capital.
Next Capital is the first NBFI on the market to implement the reverse factoring product
“One of the biggest problems that an SME faces when it needs financing to stabilize or develop the business is the lack of material guarantees to offer to banks in order to access classic crediting products. The simple solution is to look on the market for a guarantee-free financing solution (Factoring), however this process can also be difficult and does not necessarily provide the best commercial conditions.
This is why we have implemented a new product that facilitates access to convenient financing solutions for companies, that is Reverse factoring, Next Capital being the first Romanian NBFI to include this product in its portfolio. With this solution, large companies can provide their own Suppliers with an efficient financing method through factoring, under preferential commercial conditions and, consequently, their much-needed financial stability. These companies (mainly key accounts) virtually become the warrantor for their SMEs during the financing process, as they facilitate the invoices issued by the Suppliers immediately after their validation and thus the money is being collected in a matter of hours. It is an ultra-fast initial approval and unwinding process, with no bureaucracy, and the Clients have 24/7 access to the data updated in real time on an online platform” adds Bogdan Rosu.
Until the end of this year, IFN Next Capital Finance S.A. estimates that it will exceed last year’s turnover by approximately 45%.
IFN Next Capital Finance SA, founded in November 2006, is part of the Next Capital Group, which offers crediting, receivable purchase and recovery solutions, and also BPO (Business Process Outsourcing) services through OPTIMA SOLUTIONS & SERVICES. Next Capital Group registered a 26% turnover increase in 2016. Next Capital is a founding member of the Romanian Factoring Association (ARF) and Bogdan Rosu has been serving as President of ARF for the past 7 years.