Finance Monthly December 2019 Edition

which has never been more widely adopted across continents than it is now. Figures from last year show that the total global volume of ABF and invoice factoring was at US$3 trillion, an increase of 5% from 2017. [2] What is attracting SMEs to this form of lending is the fact that ABF can offer more affordability, flexibility, fewer covenants and simple access to working capital. The European ABF industry has been growing strongly in recent years - France has the second-highest volume of ABF/ factoring, which has been growing by 10% every year for the last seven years. 16 In Germany, ABF is firmly established and it has been growing at an average of 5% over the last eight years. 17 With an established presence in both France, with clients such as ABN AMRO Commercial Finance, Bibby Factors France and Société Générale Factoring France, and in Germany, with clients including ABN AMRO Commercial Finance, Société Générale Factoring Germany, Siemens Financial Services, HPD LendScape has seen the benefits that alternative financing can provide for SMEs. Poland has emerged as the largest market for ABF in Eastern Europe, increasing by 12% in 2018 alone. 18 ABF is also being offered across the business spectrum. According to research consultancy Round Window, in Europe, 62% of ABF advances go to large companies, while 22% go to medium-sized businesses and 17% go to small businesses. The rise of new tech solutions makes ABF and factoring accessible for even the smallest SMEs as increased speed of service allows companies to receive the funds they need quickly, based on sophisticated data analysis. Advanced techsolutionssuchastheHPDLendScape platform actually help automate these processes. This means that businesses can manage their facility and provide data via a single platform, making the process easier to manage. While the prospect of an economic downturn may be daunting and banks’ unwillingness to lend may not be helpful, with the array of alternative finance options now available to SMEs, they should be able to weather the looming storm. 1 https://www.imf.org/en/Publications/REO/EU/Issues/2019/10/24/REO-EUR-1119 , p11 2 https://www.ft.com/content/c8e14026-d001-11e9-b018-ca4456540ea6 3 https://www.espon.eu/sme 4 European Commission – 2018 SBA Fact Sheet – France https://ec.europa.eu docsroom/documents/32581/attachments/11/translations/en/renditions/native 5 European Commission, 2018 SBA Fact sheet - Germany 6 European Commissions, 2018 SBA Fact Sheet - Italy 7 https://www.politykainsight.pl/multimedia/_resource/res/20105186 8 https://www.crowdfundinsider.com/2019/11/154089-germany-smes-are-finding-it harder-to-receive-bank-financing-reports-creditshelf/ 9 https://www.ipe.com/pensions/pensions-in/france-sme-cash-lifeline-gains-investors attention/10001685.fullarticle 10 https://www.eulerhermes.com/en_global/economic-research/insights/European-SMEs Filling-the-bank-financing-gap.html 11 https://www.researchgate.net/publication/330324521_THE_SOURCES_OF FINANCING_FOR_SMES_IN_POLAND 12 https://www.aima.org/article/acc-publishes-financing-the-economy-2018.html 13 https://www.aima.org/educate/aima-research/non-bank-lending-in-the-european union.html 14 https://withcadence.io/blog/an-emerging-alternative-investment/ 15 https://www.bankingtech.com/2018/07/bnp-paribas-launches-fund-for-sme-lending/ [2] https://fci.nl/en/news/PRESS%20RELEASE-%202018%20Preliminary%20Global%2 Factoring%20Statistics/5459 16 https://fci.nl/downloads/Annual%20Review%202019.pdf – FCI report 2019 17 https://fci.nl/downloads/Annual%20Review%202019.pdf – FCI report 2019 18 https://www.hpdlendscape.com/resources/news/central-and-eastern-europe-a-fast growing-factoring-market/ 21 www.finance-monthly.com FINANCE & BUSINESS - ECONOMIC DOWNTURN IN EUROPE