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EUF-FCI EU Factoring Summit in the COVID world

The annual EU Factoring Summit will take place virtually this year due to the current situation with COVID-19

EUF and FCI join their forces to present the online version of the usual yearly conference. The conference will include presentation of the statistics but also presentations and panel discussion about this special time.

The agenda includes: opening by EUF Chair Françoise Palle-Guillabert that will highlight the EUF actions in 2019-2020. The Factoring Industry in EU by Magdalena EUF Chairman of the Economic and Statistics Committe that will present 2019 final and 2020 first half preliminary statistics. A panel discussion on the impact of COVID-19 in EU chaired by Patrick de Villepin, FCI Chairman. Presentations on EUF main advocacy issues such as EBA Guidelines on loan origination and monitoring, Definition of Default, Basel 3, AML, European Commission Study on Supply Chain Finance by Mrs. Magdalena Wessel, Chairman EUF Legal Committee and Mr. Diego Tavecchia, Chairman of the PRC Committee. The closing speech for the webinar will be by FCI Chairman Mr. Patrick de Villepin.

Please register here

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EU Federation for Factoring and Commercial Finance webinar: building bridges between Finance and SMEs

Brussels, October 14th, 2020 – Stéphanie Yon-Courtin, MEP (Renew Europe) chaired yesterday a webinar organized by the EUF and dedicated to SMEs’ funding.

Moderated by Fausto Galmarini, vice chairman of the EUF, the event gathered top EU policy makers, Stéphanie Yon-Courtin, Member of the European Parliament and Vice-Chair of the Economic and monetary affairs committee (ECON), Andrea Beltramello, cabinet member of Executive Vice-President Valdis Dombrovskis, factoring providers and EU and national SMEs’ representatives from France, Germany and Italy.

Welcomed by Françoise Palle Guillabert, Chair of the EUF, the panelists shared their expertise, experience and analysis of the ongoing crisis. They also developed the issues that SMEs are facing in obtaining funding, initiatives of the European institutions and solutions provided by finance players.

Stéphanie Yon-Courtin recalled the commitment of the Renew Europe towards the SMEs and asked for more ambition from the EU institutions. She reminded the work already done at the European Parliament, notably through the Capital market union INI report that aims to foster equity financing for SMEs via notably equity research for SMEs, a European Fund for IPOs, a simplification of SMEs’ prospectus, solvency instruments or better tax incentives. Among all the sources of funding, she also noted that factoring could be part of the solution.

Françoise Palle Guillabert added that by providing € 275 billion of working capital financing to 280,000 businesses in 2019 (87% of which are SMEs), factoring can be the bridgehead of a finance serving the economy. She also made an overview on the main EU regulatory topics of interest for the factoring industry, from the EBA guidelines on loan origination and monitoring, the definition of default and the Basel III implementation in the EU. Patrick de Villepin, Chairman of FCI, underlined that European factoring represents more than two third of the worldwide turnover, providing a bulk of services for SMEs: financing, guarantee against insolvency and cash collection.

Alban Maggiar, President of SMEunited, tackled the difficulties EU SMEs are currently experiencing. In June 2020, 80% of SMEs reported a loss of turnover due to lockdown and other crisis measures and 40% of them reported liquidity problems. In that context, the relevance of factoring as tool of finance for SMEs is highly welcomed as it contributes to liquidity and increases cashflow. He also called for pursuing the cooperation between all stakeholders to get the best financial solutions for SMEs.

Andrea Beltramello presented the EU Commission’s initiatives to foster liquidity and ensure productive capacity in tough economic times (first during the pick of the COVID-19 crisis and then today in this “recovery” time) which is essential for SMEs and their staff. He explained the key would be to strengthen the economic resilience of the EU and to make the recovery as fair and inclusive as possible via the diversifications of the sources of funding.

Theses interventions were then tested against the real-world experience of three SMEs or Companies operating with SMES, coming from Germany (Paulus Korste - Crombeen GMBH), France (Sebastien Celeri - Architect), and Italy (Paolo Lualdi – CFO Cremonini SpA). They talked about their operational challenges in obtaining funding and how factoring had provided an effective solution.

At the end of the workshop Fausto Galmarini thanked all the panelists for their effective contribution to the discussion and underlined the need of an actual support from the Governments and the Regulators by means of measures coherent with the importance of the SMEs in the real economy and the role played by the Factors for their funding.     

The link to the recorded event is available by clicking on this link.

SYC workshop 2

Online Workshop BUILDING BRIDGES BETWEEN FINANCE AND SMES

“SMES’ ACCESS TO FINANCE: A NEW “FINANCING MIX” TO BE SET UP WITHIN THE EU”

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The 2020 ECB lending survey showed that the demands for loans or drawing of credit lines from firms have surged during the second quarter 2020 and reached the highest net balance since the survey was launched in 2003. The COVID-19 outbreak has highlighted an existing problem faced by European SMEs: the need for larger and more diversified funding opportunities.

As economic reality and funding access are different among EU Member States, this online workshop will gather SMEs from all the EU. They will testify and discuss their day to day funding issues and needs in front of representatives from the European Parliament, the European Commission and the financial industry. EU representatives will develop the ongoing European initiatives to bring closer SMEs and financial players, such as the Capital Markets Union.

By providing € 275 billion of working capital financing to 280,000 businesses (of which 87% are SMEs) in 2019, factoring can symbolize the bridgehead of a “finance serving the economy”. In direct link with the day-to-day business, factoring has become a key financing tool for SMEs, and was described in the 2020 European Commission’s study “as an effective solution to combat cash flow issues and improve working capital, also in the context of a credit crunch and persistent late payment” and in the 2018 European Parliament INI report as an “innovative type of payment” and a means to avoid SMEs bankruptcy due to late payment.

To register, please click here

More information: 

EU factoring turnover figures in the first half of 2020

Data gathered on the European factoring market for H1 2020 has shown, for the first time in 11 years, a decrease in factoring turnover of 6.0% year on year. The total factoring turnover reached €853 billion compared with €911Bn in H1 2019. Information received from country members’ organisations indicates that this drop is principally the result of national lockdowns, and in some countries of the impact of government measures to sustain enterprises and especially their treasuries.

What is interesting is that the decrease in factoring turnover was almost in line with the reduction in EU GDP of 6.3%. This is why this year’s GDP penetration ratio was similar to last year’s (11.1% compared with 11.2% in 1H 2019); normally we see factoring growing faster than GDP.

The trend differs between countries, but 3 of the top 5 European factoring markets were the hardest hit.

The biggest falls were observed in:

  • UK, with 14% decrease year on year, significantly greater than its GDP reduction of 7.7%,
  • Italy, with a 13% decline, whilst GDP shrunk nearly 11%,
  • France, with a 10.2 % fall, compared with a 9.3% reduction in GDP,
  • Portugal, (not the one of the largest markets) fell 9%, and GDP reduced 7.1%,
  • Belgium with a 5% turnover reduction and an 8% decrease in GDP.

The principal causes of these reported falls were:

  • decreased client turnover,
  • insufficient, poorly targeted or belated government interventions.

Despite this difficult environment, there were also countries where a yearly increase was reported:

  • Netherlands, where turnover grew 4.6%, when GDP decreased by 2.6%,
  • Norway, which saw 2.6% of growth, when it experienced an almost 13% decrease in GDP,
  • Poland, which grew by 2.4% whilst its GDP fell by 2% (although if we exclude the increase in turnover of one main member, the overall market decreased by 2%, in proportion to the GDP decrease),
  • Denmark, 1.7% growth against 2.6% GDP reduction,
  • Germany 1.6% growth compared with a 4.2% fall in GDP.

Information from the German and Polish markets indicates that in both these countries the support measures taken by their governments has helped to soften the economic impact of lockdown and to minimize its effect on the supply chain.

The leader of the European market is France with almost 18% of the market. Next are Germany with 15.8%, UK 15.3%, Italy 12.5% and Spain 10.2% respectively. These top 5 countries represent 71.7% of the EU factoring market.

Françoise Palle-Guillabert, Chairman of the EUF, noted: Beyond the headline figures, this is an unprecedently challenging time for all of us. The international Covid-19 pandemic is shaking the whole world and the impact on our economy is even tougher than the 2008 financial crisis.  Since the beginning of the pandemic, the EUF has been in close contact both with the European Union economic authorities, and with its European sister federations, in order to review and soften some regulations - such as the New Definition of Default, the Non-Performing Loan, EBA Guidelines on Loan Origination and Monitoring - and thereby seeking necessary and appropriate support for business. More than ever, and especially in the context of all the state supporting plans that have been put in place, the factoring industry has a key role to play in sustaining economic recovery, employment and wealth creation in Europe”.

ENDS 21.09.2020

Notes to Editors

The EUF is the Representative Body for the Factoring and Commercial Finance Industry in the EU. It comprises national and international industry associations that are active in the region. Its members and partners represent 97% of the Industry turnover.

The EUF seeks to engage with Government and legislators to enhance the availability of finance to business, with a particular emphasis on the SME community. The EUF acts as a platform between the Factoring and Commercial Finance Industry and key legislative decision makers across Europe, bringing together national experts to speak with one voice.

Data has been adjusted to ensure that currency exchange rate fluctuations do not distort the results.

For more information and full data analysis:

See our website:                                     www.euf.eu.com

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Building Bridges between Finance and SMEs

SAVE THE DATE: 13 October 2020

Corporate funding, in particular SMEs financing opportunities, has been a major topic of the EU public debate since the 2008/2009 financial crisis.

As one of its top priorities, this issue deals with many aspects of EU policies and goes beyond finance-only regulation.

On 13 October, European Parliament, European Commission, Financial industry and SME's and company representatives will gather at the European Parliament to discuss on financing issues SMEs can meet and the answers European policy-makers and the financial industry can provide. Due to the situation, the event will also be broadcasted on live.
 
In order to give the best possible insights from the “real economy” actors, the workshop will give a significant tribune to SMEs and company executives from different European countries.

In front of some of the most relevant EU policy-makers and industry representatives, they will be able to voice their “day-to-day” concrete issues and pressing concerns in a significant – and differentiated – way.

Chaired by : Stéphanie YON-COURTIN, Member of the European Parliament, Vice-chairman of the ECON Committee

Registration: https://docs.google.com/forms/d/e/1FAIpQLSdQhdmWkCRjrqhbtR4W6NVRIGOhX5VHSvTl4Dmpz8nD78_Ujw/viewform

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