“A company that lacks access to capital will find it very difficult to grow”

The Mexican state of Chihuahua is currently the largest exporter in all of Mexico, with over $70 billion accumulated in exports in 2023. With a privileged location—boasting around 800 kilometers of land border with the United States—it is positioned to capitalize on a rising trend: nearshoring, or the outsourcing of production to nearby foreign countries. Disruptions in supply chains during the COVID-19 pandemic highlighted the risks of long-distance distribution, leading many companies to reconsider their strategies.

Mexico stands to gain significantly from this trend: some estimates suggest it could add an additional 3% to its GDP by 2028. In 2023, Mexico surpassed China as the United States’ top trading partner, despite trade tensions arising from the migration crisis. Equity Link, a Chihuahua-based fintech with nearly a decade of experience, was born to address this opportunity. This startup offers factoring services and credit lines specifically tailored to the export manufacturing industry, enabling local businesses to grow and increase their business volume, as CEO and founder Mario Antúnez explains to BBVA Spark.

What is Equity Link’s value proposition, and how did the company get started?

Equity Link is focused on providing financial solutions to Mexico’s export industrial sector. The idea originated from a visit I made to one of the manufacturing plants in Chihuahua 10 years ago. Chihuahua is Mexico’s largest exporter, and Mexico is one of the world’s top generators of engineers, with over 100,000 engineers annually. However, only 3% of those exports remain in the region, primarily due to the lack of financial channels in the Mexican system. This means there is no regional integration into the global supply chains operating throughout Mexico due to the lack of financing sources.

We want Mexico to evolve and join manufacturing through the integration of global supply chains at the local level. Operating with a technological tool that can automate operations has allowed us to provide much better service and a range of benefits for supply chains and all their participants.

What sets your company apart from other B2B payment or lending proposals?

We are obsessed with providing excellent customer service. All our development, all our technological growth, has always been aimed at enabling companies to have better development, better integration, and better growth. We are not a company seeking profit or excessive growth to meet investor goals; we are a Mexican company that believes in Mexico, invests in Mexican companies, and aims to achieve that generational change.

When you add a technology component to an appropriate niche, people join. All the solutions we have been developing at Equity Link are very focused on helping companies work better, facilitating their operations, providing better insights for decision-making. We have created a platform that provides excellent metrics, helping the companies we work with have greater control and make more appropriate sales and collection projections.

How do you leverage technology to provide this service?

The first collaborator at Equity Link was a software developer. Over the past 10 years, we have been evolving programming languages and tools, and now we have many machine learning models. We implement various tools with artificial intelligence; we have very powerful APIs with connections to more than fifteen different information sources to perform detailed analyses. The platform allows users to have a more efficient cash cycle visualization, issues recommendations, and allows for more appropriate planning.

Additionally, we also provide tools for automating purchasing processes, intending to increase efficiency and transparency in transactions in supply chains.

What are the advantages of accessing early financing like that offered by Equity Link for a company?

The first is the opportunity cost. A company that lacks access to capital will find it very difficult to grow. If you compare Mexico with other developed countries, in Mexico, there is one bank for every 94,000 companies, while in the United States, there is one bank for every 1,500 companies. This speaks to the low availability of capital, which is important because if a factory has a production capacity of 1,000 but lacks capital to produce more than 200, it has idle installed capacity. And it’s not the same to earn a 25% margin on a sale of 100 as it is to earn a 20% margin on a sale of 300, right?

The second is financial planning. If you don’t have visibility into when you will receive the money you need, it will be very challenging to plan what you will do in developing your company. And the third is control: in Mexico, we are competing against unregulated lenders and loan sharks, who work with rates that are three times more expensive than regulated financing like that of Equity Link.

What does collaboration with an entity like BBVA Spark bring to Equity Link?

It’s an initiative that is really refreshing to see in the market, especially coming from Mexico’s largest bank and one of the leading banks globally like BBVA. It has a dynamic team with a fresh outlook, with new leadership vigor, making it easier to engage with companies actively driving business development in Mexico.

Equity Link is at the intersection of two rising trends, fintech and nearshoring. How do you think they will evolve?

These are megatrends that cannot be stopped. On one hand, technological development is a wave that is evolving faster and faster, and one must participate. And it fits very well with this new global paradigm, nearshoring for Mexico’s export industrial sector. The world has already changed and is heading towards a market that will triple in the next ten years. But to seize the opportunities of this market, you have to be inside, know it, and know how to address it.

What advice would you give to an entrepreneur looking to launch their project or scale their business in 2024?

I would tell them to go for it. There is no better time to start a business than now. Work for something that is a higher good, to solve a problem that is truly important. Depending on the importance of the problem you want to help solve, that will be the result and benefit you will receive and the impact you will have.