If you are a Latin American small business owner, or a company that does business with Latin American firms, this article will come as great news for you as Bogota-based startup Portal Finance and Latin America’s largest financial services institution, BTG Pactual have connected to increase support for small business “with a new commitment for a $200 million lending joint venture”.

Since the 2008 recession, many small businesses have found lending difficult with interest rates hitting between 20% and 50% annually.  For Latin America, the past ten years have seen a substantial change in particular when it comes to venture capital. “For the last several years Colombia’s economic fortunes have been rising since the successful conclusion of peace talks with the country’s largest rebel group, the Revolutionary Armed Forces of Colombia, brought an end to 50 years of civil war.”

Portal Finance is looking to continue this trend by helping to give banks a better window into their borrowers finances by tackling the issue of lending from three ways.

  1. 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.
  2. Second, the company has a window into the receivables of small businesses through the large corporate customers they supply.
  3. Finally, the company has reached out to the small businesses themselves to collect additional data, giving lenders a complete view of the borrowers’ financing.

Portal Finance launched in 2016 and has since issued 200 loans to Chile and 500 in Colombia. With the new $200 million, an increase from $5 million when they first started, the number of small business owners receiving loans should increase greatly.

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