The role of the Factoring and Commercial Finance Industry in the European Union

The Commercial Finance and Factoring industry is a significant provider of working capital finance to businesses in Europe. In 2013, client turnover in the EU28 was close to €1.3 Trillion. Principally focused on the SME sector, this type of funding is flexible, adaptive and an effective tool for financing growth. It provides real support to the economy and employment.

And yet it remains a type of funding which is not always well known or well understood. Regulators and lawmakers have not always been aware of its benefits or its impact. Users and their advisors have not always seen it as their first line of finance.

This study is the first formal academic and objective effort to try to address some of the questions relating to the industry. How large is it? How many companies are supported? How many providers are involved? What is the combined economic impact?

The EU Federation for the Commercial Finance and Factoring Industry (EUF) comprises 14 European National Associations, International Factors Group and Factors Chain International. The members of these associations represent around 97% of the volume of business transacted across the EU 28 countries.

The EUF approached the Finest research group to undertake this work on its behalf. This study comprises a review of the key markets: UK, France, Italy, Germany, Spain and Poland. The initial data sets encompass 2010 to 2012, depending on sources. It is the intention of the EUF to develop this scientific analysis both to include more current data and to widen the sample to ensure that this becomes the ongoing reference source of information on the Industry, and more importantly, the key destination document for those wanting to understand its economic value.

For it is this greater understanding of how we support the everyday economy, real jobs and wealth creation that will allow us to enhance awareness the Industry and its applications. It will enable lawmakers and regulators to ensure that vital and appropriate regulation of the financial sector recognises the role and contribution of our types of funding.

As Independent Chairman of the EUF, I would like to thank everyone who has been involved in the collation and creation of this analysis. It truly represents a milestone in co-operative endeavour on behalf of the Industry.

I hope that, like me, you will find the content both informative and illuminating.

John Gielen
Independent Chairman EUF

FINEST Study of economic impact of Factoring is available for EUF members in Members only section.