Monthly 40% rise for Compania de Factoring

Factoring is a financing solution for long-term deadline invoice payment. The factoring company buys unpaid invoices from enterprises and finances these with a percen-tage of the invoice value.

"We did foresee a significant increase in operations, but the rise exceeded our expectations. This pace will surely continue for at least one year," Compania de Factoring's CEO, Valentin Chirca, told Business Standard.

He added that the domestic  rise in factoring operations for construction materials is part of a  regional trend. "Intermarket subsidiaries in Poland, Hungary and the Czech Republic are posting similar increases and we are expecting this trend to continue for the medium-term, Chirca said.

According to the factoring company's CEO, 90 percent of clients request RON financing for deliveries in Romania, while a further 10 percent are looking for financing in euro. For domestic and international transportation, 80 percent  have concluded factoring contracts in RON, and the reminder in euro.

There have been greater increases in factoring operations (some 60 percent) in the counties of Sibiu, Arges, Ialomita, and Brasov. "We plan to open new offices in the cities of Arad and Suceava to meet factoring requests in northern and western areas," Chirca said.

Compania de Factoring posted net sales worth €20 million in the first quarter of 2007 and company officials forecast net sales exceeding €150 million by the end of the year. Other companies providing factoring on the local market are  Banca Comerciala Romana (BCR), BRD Groupe Société Générale, Unicredit Romania, Raiffeisen Bank, ABN Amro Bank and Romexterra. The domestic factoring market is currently worth €650 million and is expected to exceed €1 billion by the end of the year.

"We did foresee a significant increase in operations, but the rise exceeded our expectations. This pace will surely continue for at least one year Valentin Chirca CEO, Compania de Factoring