The saying “Time is money” is one of the fundamental principles of the business world, and in Latvia’s business environment it is now truer than ever. The dynamic work rhythm is strengthening the trend of companies promptly borrowing the financing needed to implement projects and repaying it flexibly, using grace periods and other solutions. Data compiled by the business financier Cityfinances show that companies seek to receive financing within a day and repay it in approximately one year.
This trend reflects companies’ desire to be as flexible as possible, avoiding long‑term commitments in an unstable geopolitical and business environment. Reports by the Organisation for Economic Co‑operation and Development (OECD) and the European Central Bank (ECB) for 2024 and 2025 also indicate that companies are increasingly using short‑term financing instruments instead of traditional long‑term bank loans. This is driven by several factors. The unpredictable rise in interest rates in 2022 made long‑term loans disproportionately expensive, yet companies needed funds for development, so they tried to borrow money only for as long as necessary to minimise interest costs.
The second factor is the need to quickly obtain working capital without unnecessary bureaucracy.
“Most often, companies turn to Cityfinances when they need financing to implement a project. The company’s management knows they will receive payment only after several months, but funds for purchasing raw materials, employee salaries, taxes, and other important payments were needed already yesterday. Therefore, a prompt loan is required, which can be repaid soon after the project is completed. Since Cityfinances reviews company applications within 5 minutes and transfers the money to the client’s bank account immediately after approval, businesses are happy to use the opportunity to obtain financing within a single day,” says Cityfinances head Ivars Vītols, adding that Latvian companies most often borrow between 45 and 125 thousand euros at a time and repay the loan on average within one year. The fact that this arrangement satisfies companies is confirmed by the fact that 92% of Cityfinances clients have requested and received subsequent financing.
OECD data show that the trend of fast loan repayment by companies is also observed elsewhere in the world. Working capital is usually borrowed for one to two years, while money borrowed for invoice financing is repaid within as little as 30–90 days.
During its 10 years of operation, Cityfinances has issued more than three thousand loans to companies in the most diverse sectors of the Latvian economy, helping them implement various growth projects. For example, a metalworking company borrowed funds to purchase more modern equipment and increased its income by more than 200% within 18 months. For an agricultural company, a fast loan made it possible to take advantage of a favourable offer to automate the production process and significantly increase income in the very same season. Meanwhile, for a logistics company, rapidly received financing helped repair a truck immediately and avoid its downtime.
About Cityfinances
Cityfinances is a Latvian‑owned company specialising in issuing loans to businesses. Over 10 years of operation, Cityfinances has issued loans to companies totalling at least 300 million euros, helping more than 3,000 businesses from a wide range of sectors to implement development projects. A key advantage of Cityfinances’ business model is fast disbursement of financing. Just 5 minutes after submitting a request, a company receives a response, and if the assessment is positive, the loan is transferred on the same day.
More information: www.cityfinances.lv
This is a paid publication.
Originally published at https://inc-baltics.com/latvijas-biznesa-vide-nostiprinas-tendence-kreditus-uznemumiem-sanemt-operativi/
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