Portfolio Partner Profile

Advance Global Capital

The Advance Global Capital, Ltd (AGC) is an open-ended fund that provides debt financing to non-bank financial institutions ("NBFIs") that offer factoring or invoice discounting services to small and medium enterprises ("SMEs"). The Fund's strategy is based on the premise that SMEs, particularly those in developing countries, have a significant unmet need for financing. A second premise is that invoice factoring is uniquely suited to address this problem because it transfers credit risk from small, harder-to-finance businesses to the larger companies that buy their products.

Featured Impact Story

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Impact Story

Elena has been able to adapt and thrive.

Elena, matriarch and founder of La Esperanza (‘Hope’), is no stranger to the need to adapt. As a young widow raising three children, Elena combined her high school education with sheer grit and determination to launch her first company, which quickly grew to employ 300 people. When Ecuador’s 1998 currency crisis caused the Sucre to plunge in value, she was forced to shut down, but continued to plan for the day she could resume operations.

A few years later, Elena relaunched her company, La Esperanza. She began by working with a few ‘manquillas’ (home-based workers). Over the years the company has evolved to have diverse production and sales channels, allowing it to adapt to changing conditions. In addition to selling children’s clothing to department stores, La Esperanza sells online and through a few small stores. The majority of production occurs in her factory, where 160 people (80% of whom are women) are employed, but Elena’s team also provides work to around 200 women working in rural manquillas across the country. Beyond commercial activities, La Esperanza runs a community outreach program in partnership with a state agency.

Elena has once again proven her ability to adapt during the COVID-19 crisis. Due to pandemic restrictions, she had to temporarily shutter her factory. To keep business moving forward, Elena obtained a certificate that allows her to go to her factory to cut fabric for new orders and deliver it to her staff. While she cannot interact with department store customers in person, Elena maintains her decades-long relationships with them over the phone. With the help of Elena’s son, Juan Costa, the company has also expanded its product line and landed a contract to create PPE for Ecuador’s frontline workers.

La Esperanza is not immune to the effects of the pandemic, but Elena’s efforts have gone a long way. Since late May, only 10 employees have been laid off. Online store activity has increased, and the PPE contract has brought in $150,000 in new sales. With AGC’s local financial partner by her side, Elena has been able to expertly navigate continually changing markets. Factoring has offered her business a backbone of stability, enabling La Esperanza to quickly respond to demand.

Despite the flux of economies, currencies, and pandemics, Elena has been able to adapt and thrive. Rooted in her desire to support her family and the families of other women, Elena continues run her business with the belief that workers matter, standards should be high, and weathering uncertainty stems from relationships that uphold trust and hope.

Required Credits: Advance Global Capital Ltd

Impact Story

Olivado directly and indirectly impacts the lives of more than 11,000 people

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Olivado, the foremost producer of avocado oil worldwide, originally began farming and production in New Zealand in 2000. By 2006, it established operations in Central Kenya — now one of the most productive exporters of avocado oil and fresh avocado fruit in the world. By April 2019, it will have opened additional operations in Tanzania, rounding out its presence in 33 countries. Like most food manufacturers who depend on a vast farmer network, Olivado was plagued by a lack of adequate cash flow resulting from mismatched payables and receivables. To create a more sustainable business for itself and its suppliers, Olivado partnered with one of AGC’s financial partners, a leader in innovative and inclusive SME financing in Africa, to improve its cashflow management and support its suppliers. AGC’s partner pays small holder avocado farmers cash on-delivery via their supply chain finance platform where the buyer has uploaded an approved supplier invoice into the system. On day 60, the partner collects the nominal invoice value plus interest and charges from Olivado – matching its expected receivables from its customers and relieving cash flow pressure along the supply chain and thus strengthening everyone in the supply chain from the farmer to the final retailer of avocado products. Olivado directly and indirectly impacts the lives of more than 11,000 people in its local communities where its own staff and contracted farmers live. Women represent 43% of their contracted farmers and 40% of their own workforce and hold significant positions in the senior ranks of the firm.

Impact Story

Local, independent providers that understand entrepreneurs’ needs

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For nearly 25 years, Sunita Patel has been successfully managing Dubai-based Vasoya Trading Co L.L.C., one of the leading stockists and traders of electrical accessories for control panels and switchgears in Dubai. After completing her master’s degree in India 1997, Sunita moved to Dubai and joined her family’s small import business. However, given her entrepreneurial spirit, she branched out on her own two years later. Since starting her business, Sunita has gone from importing three items to importing over 800. Her business, called Vasoya, employs a team of four and stands committed to quality, timely, and fairly-priced products.

As part of Sunita’s commitment to her small business’ success, she oversees nearly every aspect of her organization. Her business supplies to local infrastructure projects, supporting local economic growth and modernization.

However, when the market dips, small businesses such as Vasoya are often the first to feel the negative effects, as customers extend payment terms and banks curtail lending to small businesses. According to Sunita, “When the economy started facing difficult times, lending conditions became extremely rigid.” She faced high rates and minimums and had to wait longer than she could afford to.

Fortunately, Advance Global Capital’s (AGC’s) local funding partner is providing Vasoya with flexible capital, which is known as factoring. Benefits such as a one-time documentation process, and a 24-hour window between requesting and receiving funds enabled Sunita to keep her company competitive. “I’ve been working with AGC’s partner for seven months. At the beginning, I thought it would be a temporary way to give my company a boost to launch new products and ensure longer sustainability. I thought I would have banks to fall back on. Now, I don’t even entertain the idea of applying for funding from banks.”

Factoring from local, independent providers that understand entrepreneurs’ needs can often be a lifeline to small, women-owned businesses. Funneling capital into underserved businesses also stimulates revenue and strengthens local financial ecosystems – especially important in uncertain times.

Required Credits: Advance Global Capital Ltd

Return to Portfolio:

Sectors and Topics:

Small Business
Gender Equity

Region(s):

Central America & Caribbean, East Asia & Pacific, Europe, Middle East & North Africa, North America, South America, South Asia, Sub-Saharan Africa

Countries:

N/A

US States:

First Year of Investment:

2017

Website:

https://advanceglobalcap.com/

Social Media:

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