Secured Loans for Small and Medium-Size Companies

This system for the granting of loans against accounts receivable for working capital needs of small and medium-size enterprises is guaranteed by a reciprocal guarantee company. Under this operating mechanism, companies can stabilize their cash flows, expand their financing base, grant credit to their customers on the basis of the due dates of their commitments and improve their economic equation.

The system is designed for small and medium-size enterprises that are legally incorporated as corporations (Sociedades Anónimas) or limited liability companies (Sociedades de Responsabilidad Limitada) and other forms of legal establishment, are properly registered, and become “participating partners” in Garantizar S.G.R and the Fondo de Garantía de Buenos Aires.

Reciprocal Guarantee Companies are legal entities governed by Laws 24,467 and 25,300, also known as the SME laws. Their principal corporate purpose is to grant guarantees to their participating partners, as well as to provide technical, economic and financial advice.

Garantizar S.G.R. was the first Reciprocal Guarantee Company to be set up, serving all sectors and operating in Argentina since 1997. It was also the first such company to cover the entire country and leads the market in number of participating partners and guarantees granted.

Fogaba S.A., which is majority owned by the state, was created by Provincial Law 11,560. Its exclusive purpose is to grant guarantees for a fee to small and medium-size enterprises located in or carrying out the bulk of their business in the Province of Buenos Aires. The guarantees that are issued can be used to secure up to 75% of the loans applied for by the benefiting companies.