This presents a challenge for SMEs, mainly because given the current inflationary context and the increase in financing rates, the longer the collection terms, the shorter the net that is entered into their accounts to face the increasing costs of production and / or transport.
It is because of that from IEB’s SME financing unit, we want to propose a series of alternatives aimed at “Make funding cheaper” through the capital market in the event of a possible adjustment in collection days or some other measure that directly impacts the finances of small and medium-sized companies, under a main slogan and that is: “take the largest amount of financing possible at negative real rates.”
Juan Pablo Kirasian, SME Commercial Manager for Investing in the Stock Market, comments “Deferred payment checks are the most common form of collection in the SME field, but they are also the representation of a very frequent mistake in portfolio management and it is to keep them until they are needed. For this reason, the Argentine Securities Market (MAV) offers three alternatives to discount physical checks or echeq at negative real rates and these segments can be used in a complementary way to each other, either having a SGR guarantee, public securities to offer as collateral or that the SME is a provider of first-line companies ”.
In case the company does not immediately need the result of these operations, the Common Investment Funds offer the possibility of managing the CASH MANAGEMENT in a very safe, fast way and will be generating interest, which means, continue to earn real rate points negative in the CFT (Total Financial Cost) of the financing taken initially.
Endorsed segment
Any SME can initiate a qualification process and obtain an endorsement to sell their own Deferred Payment Checks or those of their clients, which (thanks to the good credit of the SGR) are negotiated at very competitive rates in the market (35% TNA-40 % TNA up to 360 days).
SDirect segment – Value chain
Juan Pablo Kirasian believes that: “here the buyer funds focus on the quality of the signatories of the checks, that is, if the company is a provider of first-level signatures and they pay them with checks, the SMEs can discount them directly in the market at average rates of 39% per annum for 90 days. In this case, since there are no intermediary costs, such as the SGR fee, the CFT (total financial cost) is very convenient and follows the premise of financing at negative real rates “
Guaranteed Segment
Through the integration of guarantees (public securities, shares of FCI, etc.), the SME can have a negotiation quota of deferred payment checks (subject to the capacity of the guarantees that it integrated), but there it can plan with greater freedom the choice of terms and nominal amounts of checks. The rates of this segment are on average for 180 days at 41% per year and for 360 days at 44% per year and it should be noted that both own and third party checks can be discounted
Electronic credit invoice
The FCE is mandatory in all commercial operations where an SME and a large company participate and has an acceptance period of 30 days in which it can be expressly or tacitly established (after 30 days without a response from the recipient) with which automatically becomes an enforceable title and can be traded on the MAV at an average rate of 38% for up to 90 days.
Conclusion, From IEB we believe today more than ever it is essential for SMEs to have accessible sources of financing. It is not only a great tool to finance working capital, essential for the operation of the business, but also to mitigate the impact on margins and / or costs that may cause a stretch in payment terms by your clients. At the same time, With a view to the upcoming elections, advancing future collections through the sale of instruments such as deferred payment checks or FCEs is an excellent way to hedge against possible post-electoral ups and downs. In this sense, the capital market continues to be a great ally, exhibiting negative real financing rates (below inflation).
Head of Operations for SMEs IEB (Investing in the Stock Market)
