The saying "Time is money" is one of the basic principles of the business world, and in the Latvian business environment, it is now truer than ever. The dynamic pace of work is reinforcing the trend for companies to borrow the financing necessary for project implementation quickly and repay it flexibly, using credit holidays and other solutions. Data compiled by the corporate financier Cityfinances shows that businesses tend to obtain financing within a day and repay it within about a 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 Organization for Economic Cooperation and Development (OECD) and the European Central Bank (ECB) for 2024 and 2025 also show that companies are increasingly using short-term financing instruments rather than 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, but companies needed funds for development, so they tried to borrow money only for as long as necessary to minimize interest costs.
The second factor is the need to obtain working capital quickly and without unnecessary bureaucracy.
"Most often, companies turn to Cityfinances when they need financing for a project. Company management knows that payment will be received in several months, but the funds for purchasing raw materials, employee salaries, taxes, and other important payments were needed yesterday. Therefore, they need a quick loan that can be repaid shortly after the project is completed. Since Cityfinances reviews applications in 5 minutes and transfers the money to the client's bank account immediately after approval, businesses are happy to take advantage of the opportunity to obtain financing within a single day," says Cityfinances CEO Ivars Vītols, adding that Latvian companies most often borrow between €45,000 and €125,000 at a time and repay the loan within an average of one year. The fact that 92% of Cityfinances' clients have requested and received further financing confirms that companies are satisfied with this arrangement.
OECD data shows that the trend of quick loan repayment is also observed elsewhere in the world. Companies usually borrow working capital for one to two years, while money borrowed to finance invoices is repaid within 30 to 90 days.
During its 10 years of operation, Cityfinances has issued more than 3,000 loans to companies in a wide range of sectors of the Latvian economy, helping them to implement various growth projects. For example, a metalworking company borrowed funds to purchase more modern equipment and increased its income by more than 200% in 18 months. A quick loan allowed an agricultural company to take advantage of a lucrative offer to automate its production process and significantly increase its income in the same season. Meanwhile, the logistics company was able to immediately repair a truck and avoid downtime thanks to the quick financing.
About Cityfinances
Cityfinances is a Latvian-owned company specializing in issuing loans to businesses. During its 10 years of operation, Cityfinances has issued loans to companies in the amount of at least EUR 300 million, helping more than 3,000 companies from a wide range of industries to implement development projects. A significant advantage of Cityfinances is the speed with which it issues financing. Within five minutes of submitting an application, the company receives a response, and if the assessment is positive, the loan is transferred on the same day.
More information: www.cityfinances.lv
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