EU Federation for the Factoring and Commercial Finance Industry

EU Federation for the Factoring and Commercial Finance Industry - Press release

EUF is an association of the European Factoring and Commercial Finance Industry, designed to attain common positions on key issues, with the aim of improving the conditions of the EU-based factoring and invoice financing industry.

At a time when the international factoring scene has changed tremendously, and with the growth of the industry, combined with a recent evolution towards asset-based lending, new challenges have been created. With this in mind the EUF proposes an association of European factoring and commercial finance industry representatives.

In recent years, the factoring industry has experienced an upwards increase in activity, reaching in 2007 alone a market growth of 15.01%, compared to 2006, resulting on a world total turnover of 1,176 billion employing over 80,000 people around the world. The total amount of finance provided to businesses in Europe by the Factoring and Commercial Finance Industry at the end of 2007 can be estimated at 146 billion Euros. The total turnover produced by the factoring industry in 2007 in the EU in 2007 ads up to 878 billion Euros.

Recently, factoring has become a key source of financing, mostly for SMEs, but other examples include: highly leveraged companies, financing of MBO’s and MBI’s, or financing of mergers and acquisitions, businesses with a growing need of working capital because of important turnover growth or diversification. Factoring offers companies the possibility of outsourcing credit and risk management, improving performance and quality, providing access to leading technology, and freeing up key resources for strategic developments. Factoring has proven to be a consistent financial instrument which stimulates the growth and success of companies.

EUF will act as a platform between its members and the key legislative decision makers, in order to inform them of the activities of the EU-based factoring and commercial finance industry. Through EUF representatives of the factoring industry will be able to speak with one voice, and its members will be provided with an in depth knowledge of the different policy outlooks relating to the factoring industry across the EU. EUF will provide legislators and policy makers with vital information from the industry, which will impact upon the forthcoming legislative agenda. The factoring and commercial finance industry has a valuable role to play during 2009 and will work to engage in debate with regulators, to ensure they are fully aware of the benefits that the industry has on current financial markets.

EUF represents the whole of the factoring and commercial finance industry within the EU through the direct input from its national and international associations’ members.

It is really the right moment to launch an initiative such as EUF. The tremendous financial and banking crisis we face is a vital issue for the EU SME’s and also large corporations who actually encounter much more difficulties to finance their working capital and their commercial development. Factoring, Invoice  iscounting and other ABL techniques are one of the only opportunities for banks to reduce their Risk weighted assets and to continue to increase their credits to the enterprises. Every improvement or deterioration in the legal, fiscal or regulatory environment of the Factoring/Commercial Finance industry will finally benefit or hurt the real economy. That is why the EU Institutions can and must play an important role in helping the economy to get an easier access to factoring/ABL techniques.

Mr. John Gielen, Chairman of EUF