European invoice factoring market reaches almost £1 trillion

24/05/2012

New research shows that invoice factoring is growing in its influence in the working capital funding sector.

A report from Demica found that, as credit sources remain scarce in Europe, business are increasingly turning to invoice factoring in order to get their cashflow back on track. The researchers found that the invoice finance market in Europe was worth £892 million in 2011. In addition, invoice factoring accounted for over 8 per cent of all corporate lending.

The rise of invoice discounting shows that this form of finance has become a mainstream option for companies. Demica’s CEO, Phillip Kerle, said, “As tight conditions persist for traditional lending, invoice finance – in its various forms - has stepped up to the plate to fill the funding gap.

"Our report has demonstrated its economic significance in Europe, playing a vital role in funding economic recovery at a time when bank credit continues to undergo a substantial 'squeeze'."

The survey also found that those questioned repeated a prediction that the industry will continue to grow, along with the influence of invoice finance, over the coming years.