Reaching new heights
How ExpoCredit helped an aerospace company soar above the competition.
Product
Invoice Factoring
Transaction
Increase the Factoring Line from $350,000 to $500,000
Industry
Aerospace
Country
Costa Rica
The firm is a leading provider of component repair and electronic system maintenance services in the aviation industry. The company was incorporated in Costa Rica in August 2017. It remained inactive until July 2020, when shareholders reactivated it before the local fiscal entity and obtained the necessary FAA and EASA certifications to begin operations. The company now operates from Costa Rica, with the Texas office acting as a logistics center.
The company's services include the repair of oxygen cylinders, instruments, harnesses, and accessories, as well as technical support for different types of aircraft. The company's clients include major airlines such as SkyWest, Air Wisconsin, Bombardier, Lufthansa y Turkish Airlines, with LATAM being the most recent addition to its client list.
Client Overview
Funds to Scale
In 2020, the air transport industry was among the most affected by the pandemic, causing a significant drop in revenue for airlines. The company, in particular, saw its revenue decline by 64% compared to the previous year, primarily due to payment terms above 90 days with most of its clients. The pandemic severely impacted the company's cash flow, and it had to negotiate agreements with suppliers to repay obligations.
"To overcome this challenge, our company relies on the reactivation of the airline sector and a contract with a major industry player to improve its cash flow in the medium term. Additionally, the company seeks to obtain working capital through a Factoring facility." B-CEO
Decreasing the Level of Expenses
ExpoCredit's efficient factoring process enabled the company to expand its funding. Understandably, part of its working capital needs is covered with external financing since it handles payment terms with most of its clients of up to 90 days. However, ExpoCredit is covering all of its needs, and the company is risking very little of its resources. In 2022, they received a factoring line of $225,000, which led to an increase in sales volume of $133,427. The factoring line helped them avoid additional debt to cover labor costs.
