IIC Approves Its Third Operation With Chilean Factoring Company

09/18/2007

US$30 million loan to Factorline S.A. will enable the company to increase its volume of operations

Washington, D.C. - On September 18, 2007, the Inter-American Investment Corporation (IIC) approved a loan of up to US$30 million to Factorline S.A. for funding international factoring operations with SMEs.

Factorline S.A. purchases, at a certain discount, invoices, bills of exchange, and checks issued by SMEs in the normal course of business. International factoring consists of discounting trade instruments. Factoring is used chiefly by small and medium-size companies that usually do not have easy access to bank financing.

According to Ana María Orellana, IIC Investment Officer in charge of the operation, "factoring is used chiefly by small and medium-size companies that usually do not have easy access to bank financing because they cannot provide security, lack audited financial statements, or do not have a track record in the financial system. By making it possible to discount invoices, bills of exchange, and checks, factoring increases working capital available to SMEs. The operation will help Factorline S.A. increase its volume of business and serve a larger number of Chile’s trade companies, thus benefiting small and medium-size enterprises in Chile."

In June 2007 Factorline was second in terms of its share of Chile's international factoring market, at 18.7%.

The Inter-American Investment Corporation is a multilateral financial institution that is a member of the Inter-American Development Bank (IDB) Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC’s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size. For more information on the IIC’s activities, please visit www.iic.int.

Contact: Carlos Roa/Ana María Orellana (in Chile)

Telephone: (202) 623-3955

Email: carlosroa@iadb.org/anamariao@iadb.org