Businesses across Latin America are turning to factoring and related tools like confirming to unlock immediate cash from unpaid invoices, bypassing traditional bank loans as payment delays strain operations.
In Peru, confirming — where the buyer, not the seller, initiates early payment through a financial intermediary — has gained traction among large corporations in retail, mass consumption, and mining, according to María del Carmen Camán, assistant manager of corporate products at BCP. This mechanism allows suppliers to receive funds before invoice maturity without undergoing credit checks, expanding access for smaller vendors who might not qualify for conventional financing. Ricardo Gallo, president of the Peruvian Factoring Association (Apefac), noted that while confirming draws from the same pool of clients as factoring, it complements rather than replaces other working capital loans, with banks using it to capture additional market share.
The combined market for invoice discounting in Peru reached S/52.699 billion ($14.1 billion) by the end of 2025, growing 22% year-on-year and representing roughly 4% of GDP, with about half of the volume attributed to confirming, though factoring is expanding at a faster pace, per data from Cavali cited by BCP.
In neighboring Colombia, factoring adoption is rising rapidly as companies seek liquidity amid widespread credit-based sales, where nearly 60% of invoices are paid on terms. Vivian Acuña, country manager of Kapital Colombia, explained that factoring enables businesses to convert future receivables into immediate working capital by selling invoices to third parties, typically receiving up to 90% of the value upfront without incurring debt, since the assessment focuses on the buyer’s creditworthiness, not the seller’s.
This approach has proven especially valuable for small and medium enterprises that often fail to meet traditional lending criteria, with growth fueled by the digitization of invoicing. Colombia now has over 1.5 million electronic invoicers generating approximately 34 million invoices daily, supported by platforms like DIAN’s RADIAN system, which enhances transaction security and traceability. As a result, factoring mobilizes resources equivalent to about 3% of Colombia’s GDP, establishing itself as a core tool in corporate financial management.
Despite its expansion, experts in both countries highlight a persistent gap in awareness, noting that many businesses still lack understanding of how factoring and confirming work, limiting broader adoption even as demand for faster liquidity solutions grows.
The rise of these instruments reflects a broader shift in supply chain finance, where digital infrastructure and alternative credit assessments are redefining how businesses manage working capital in economies where delayed payments remain a structural challenge.
How does confirming differ from traditional factoring?
In confirming, the buyer (debtor) initiates the process by arranging with a financial institution to pay suppliers early, whereas in traditional factoring, the seller (creditor) sells their outstanding invoices to a third party to receive immediate funds.
Why are SMEs benefiting from factoring in Colombia?
Factoring evaluates the creditworthiness of the buyer, not the seller, allowing small and medium enterprises to access liquidity even if they don’t qualify for traditional loans, since the risk is assessed based on the customer’s ability to pay.
What role has digitalization played in the growth of factoring in Colombia?
The widespread adoption of electronic invoicing, with over 1.5 million users generating 34 million invoices daily, and systems like DIAN’s RADIAN platform have enhanced security and traceability, making factoring more accessible and trustworthy for businesses.
