Investment companies like Magma Partners, which led the pre-seed and seed rounds for Portal Finance are linking innovative companies in places like Buenos Aires, Bogota, and Lima with Chile’s stable economic base to provide a market where startups can gain traction.
Portal Finance, and other companies like it, solve the problem by giving banks a window into their borrowers finances by tackling the problem from three ways. The first is by working with factoring firms who were the lenders of last resort to companies who needed cash for operations and improvement and could not take out loans or raise equity financing. Second, the company has a window into the receivables of small businesses through the large corporate customers they supply. Finally, the company has reached out to the small businesses themselves to collect additional data, giving lenders a complete view of the borrowers’ financing.
BTG Pactual agreed to a pilot in Chile in January 2018, and expanded to the USD 200 million lending joint venture in July that covers both Chile and Colombia. So far, the company has issued 200 loans in Chile and 500 in Colombia.
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