In quarantine, SMEs take loans on the Stock Exchange at less than 20%

It seems unbelievable in this context, but it happens: small and medium-sized enterprises (SMEs) can be financed today at less than 24 percent of the subsidized lines that banks implemented to pay salaries, promoted by the Central Bank.

The operation is not new, and neither is this advantage; it had occurred in the past year on several occasions in a context of much higher interest rates.

This is the discount of deferred payment checks (CPD) in the capital market, through the guarantee of a reciprocal guarantee company (SGR). Although it is not the only instrument for stock financing, it is the cheapest.

On Wednesday, the last business day of the week, the segment of checks guaranteed in the Argentine Stock Market (MAV), where SME instruments are traded, had an average rate of 19.32 percent.

But, while the paper-format CPD averaged 21.47 percent, new electronic checks (Echeq) hovered around 15.53 percent interest. And three of the largest SGRs offered single digits, with lows of four and five percent annually.

“There is a great disparity of rates. Most SGRs are well below 24 percent of banks, some less than 10 percent, “stresses Fernando Luciani, executive director of the MAV.

Explains that the suspension of clearing (compensation) and problems with physical checks generated a sharp drop in volume in the first week of quarantine, but later, with the possibility of redeposing values, the difficulty was resolved.

“For an SME that is already rated in an SGR, taking loans at these rates is very interesting. It is very close to subsidized bank loans, but they are much more agile. Today a company that presents a check in the market, the next day has the money, “says Aníbal Casas Arregui, head of S&C Inversiones.

The obstacle to operate with physical checks prompted the use of its electronic version: Echeq. At the beginning of March they were hardly negotiated (Acindar Pymes carried out the first operation the week before quarantine) and on Wednesday they represented 27 percent of the guaranteed amount.

“The Echeq endorsed, as they do not have to go through the clearing banking, they were highly demanded and the first days came out with very low nominal rates. Today they went up a bit, but they are still better. The physical checks that remain are those that were already there, ”says Matías Fornasari, an analyst at Dracma.

Demand for guarantees

The problem remains that there are few SMEs with approved lines in the SGR.

“We have a lot of inquiries because all small businesses need funds and want to take advantage of the rates,” says Victoria Alfonso of Focus Investment Management. He admits that the process is around 20 days: “The problem we have now is that the final approval has to be signed before a notary public, so we are waiting for them to resume activity this Monday,” he said.

Alfonso says that, in the meantime, companies can use other strategies. “We suggest, as exchange coverage, to transfer pesos to cable dollars, buy Treasury bonds and with these guarantee a surety in pesos; To finance themselves, you can put dollars in guarantee in an SGR and write direct checks, or put titles as a guarantee to take a bond in pesos.

Casas Arregui also highlights that electronic credit invoices can also be placed as a guarantee in an SGR.

From these intermediate entities, Ignacio Valente, commercial manager of Acindar Pymes, one of the two largest SGRs in the country, points out that they are at the limit of their level of guarantees and cannot incorporate new companies or expand the lines of which they are already clients. .

“We cannot issue all the guarantees that we want because we are limited by the risk fund, which is made up of contributions from individuals or companies. In the last two years, throughout the system, the fund did not grow at the rate that demand did, “says Valente, who acknowledges that if there were more investment from large companies, provinces and banks, everyone would win.

In Córdoba, the agents highlight the work of Avales del Centro, a newer SGR promoted by the Córdoba Stock Exchange and which is still far from granting guarantees for four times its risk fund.

Its general manager, Ignacio del Boca, maintains that the requests have increased and that progress is being made in the ratings.

“As this is being decompressed, it will be a good year for SGRs, and SMEs will have a chance to renegotiate their liabilities with a negative real rate,” he concluded.

Print edition

The original text of this article was published on 04/11/2020 in our printed edition.