Risk: Factoring Remaining a low Loss Given Default
The latest version of the EUF’s Industry Standard Whitepaper has been updated with the finalised market data for 2018. The Whitepaper research shows that Factoring and Commercial Finance (FCF) continues to be a very low loss given default form of funding, and indeed that performance had improved even since the first iteration of the survey in 2016.
Other findings in the research include that FCF:
- has a demonstrable track record of growth with €1.7 Trillion client Turnover in 2018 – up 7.9% on 2017 and 7.4% CAGR over last 10 years,
- is funding on a scale that is material to EU GDP, demonstrating GDP Penetration of 11% across the EU 28, with €240 Billion advances on €310 Billion security, 220 Thousand clients and in the order of 200 scale providers across the Region.
In addition, the study highlights:
- the three key areas of activity are manufacturing, services and distribution, representing around two thirds of numbers and three quarters of turnover and advances
- that the Industry continues to support all sizes of business, form SME to Large Corporate.
The EUF decided to create a document that would effectively communicate the nature, purpose, size and shape of the Industry to interested stakeholders and why it should be treated with consideration to its specific nature. The EUF’s first unique Whitepaper on the Factoring and Receivables Finance Industry was published in 2016.
The document proved to be a powerful tool and has been widely used and distributed as a clear description and introduction to our business. So in 2018, the EUF ExCom thought it would be a good idea to update the paper and to seek to confirm the information and arguments still hold true.
Roundwindow was kindly asked to repeat the programme and the exercise was carried out during the summer and autumn of 2018, using a mixture of live data obtained from a large scale Europe-wide survey, corporate financial data and finalised with EUF statistics for the year end 2018.
The complete report can be downloaded here: