The company faced a significant challenge: the need for additional working capital to facilitate its growth ambitions. Operating in the dynamic IT and process services market in Mexico, the company sought opportunities to expand its footprint and undertake more ambitious projects. To achieve this, they required the financial resources to scale their operations and continue delivering innovative solutions to their clients.

''I believe that Expocredit's factoring services will be instrumental in achieving our growth objectives. This partnership allows us to secure the necessary financial resources to take on larger projects and expand our reach in the market. Expocredit's expertise in factoring gives us the confidence that we can continue delivering top-tier solutions to our clients and drive our success to new heights." - Client

The company's journey was not without its hurdles. Between May and November 2022, substantial investments were directed towards expanding plant production capacities to match escalating client demands. However, these investments impacted the company's profit margins, necessitating strategic intervention.

"As a manufacturing company, our inventory encompasses raw materials, works in progress, and finished products, with raw materials comprising the largest portion. This surge in inventory is a direct response to our sales area no longer operating on low sales orders. With the stock of raw materials posing a challenge, we've realized that a proactive solution is paramount. That's why a tailored line of factoring stands as the answer to optimize our inventory management and drive growth." - Client

The client's main challenge lies in their EBITDA being stretched to cover interest expenses. Additionally, as a manufacturing company, they face inventory complexities due to the shift in sales order patterns, resulting in increased raw material inventory. To address this situation, the client is considering factoring as a potential solution to optimize their cash flow and improve supplier payments.

“Factoring will help us pay our most important suppliers, achieving savings from cash payments, and in turn, we will be able to reduce financial costs that we already have with the suppliers".- Client's CFO

Despite the client's exponential growth since its inception in 2018, the company faced challenges in terms of consistent margins and the need to increase its working capital. Despite strong sales growth, gross margins fluctuated due to constant pressure to reduce prices caused by illegal gasoline imports.

"Since the beginning of our operations, we have experienced remarkable growth. However, we have faced obstacles in maintaining consistent margins and the need to increase our working capital. Illegal gasoline imports have exerted constant pressure to reduce prices, impacting our gross margins." - Client's CFO

The biggest challenge that the client faced was reducing their cash cycle. The company was in a situation where its growth was limited by the lack of available capital to cover operational expenses.

"To drive our growth and expand our presence in new markets, we are leveraging factoring as a strategy to increase our cash flow and cover our operational expenses. This solution allows us to maintain the necessary financial stability to take advantage of new business opportunities and continue innovating in our industry." — CFO

Due to the increase in Honduran coffee exports abroad from October 2021 to July 2022, the company needed to meet the demand by optimizing its production processes. This involved complying with the quality standards agreed upon with regulatory entities such as UTZ, Fair-Trade—USA, and Rainforest Alliance, among others. As a company with mainly international sales, the payment times agreed upon with its clients and the transit of merchandise tend to be extended. Therefore, an injection of capital is necessary to meet all the market demands, remain competitive in the industry, and strengthen and expand its commercial relationships.

"As a company with purely international sales, the agreed payment terms with our clients and the transit of goods tend to be very prolonged. Therefore, an injection of capital is necessary to cope with all market demands, remain competitive in the industry, as well as strengthen and expand our business relationships." - Shareholder and Commercial Financial Manager.