What We Do

Invoice Discounting in Underserved Markets

Advance Global Capital (AGC) specializes in financing confirmed invoices of small and medium-sized enterprises (SMEs) through invoice discounting in emerging and underserved markets. AGC unlocks the value of invoices as financeable assets, particularly for women-owned businesses, through local financial institutions (“factors”) or directly via invoicing technology platforms.

Market Opportunity

All over the world, SMEs struggle to find financing to grow their businesses. They lack the collateral, financial history, and track record required by traditional lending institutions. Emerging markets without strong financial ecosystems lack sufficient alternatives to big banks. The International Finance Corporation estimates that there are more than 12 million SMEs in developing markets without access to financial services. That’s a $1 trillion financing gap[1] and a tremendous market opportunity.

Invoices as Financeable Assets

With invoice discounting, a factor purchases invoices at a discount and advances funds to the supplier immediately, based on the financial history of the buyer. Invoices are held for 30, 60, 90 or 120 days and the full amount of the invoice is collected from the buyer when it comes due.

  • The supplier receives immediate payment, less the discount, so they can buy more materials and hire more people to grow their business.
  • The factor collects on the full amount of the invoice, making a predictable profit on a short-term investment.
  • The investor realizes predictable returns with a low default rate and low correlation to traditional assets.

AGC estimates a $948.2 billion unmet demand for factoring in developing markets (excluding China).[2]

A Strong Business Partner

Although the underlying assets are short-term, our social impact goal is financial inclusion and stronger financial ecosystems over the long term. AGC works directly with financial institutions, corporates, and SMEs to support knowledge transfer, build capacity, and help develop viable financial structures for future growth. Our partners benefit from:

  • Flexible, reliable funding for innovative financial services.
  • Expert, business development support in finance, legal, and marketing.
  • Promotion of social and environmental responsibility.

Our business development program brings robust due diligence, ongoing risk assessment, and transparency to local markets to build trust and create a stronger foundation for sustainable economic growth and social stability.

[1] Access to Credit among Micro, Small and Medium Enterprises, International Finance Corporation, Aug 2013 http://financegap.smefinanceforum.org/documents/Factsheet.pdf

[2] AGC estimate based on IFG and IMF 2014 data for select emerging and developing countries excluding China