“Factoring” changed how SMEs did business in 2019Go to the news page
-Year-end results show a significant shift in SME financing across Europe
-New financing solutions have expanded possibilities for SMEs
New financing solutions changed how small and medium-sized enterprises (SMEs) did business throughout Europe last year, as shown by the year-end results from the fintech company Factris. The results from the Netherlands-based company revealed a sharp increase in alternative-financing activity in 2019, as well as a change in what those customers could achieve by financing their invoices via “factoring”.
Factris reported more than 3,000 invoices factored per month, surpassing a total volume of €250MM by the end of 2019. With so many SMEs using different forms of financing—particularly factoring—it’s clear that a shift has occurred in how SMEs are choosing to finance their businesses.
“Part of this shift in SME financing is due to the speed that factoring takes place compared with financing from banks”, explains Brian Reaves, Factris’ CEO. “When an SME needs financing because their customer hasn’t paid an invoice yet, Factris purchases that unpaid invoice on the same day from the SME, providing them cashflow to use however they need. Thus, payments can be made earlier, allowing the SME to negotiate a discount on purchases.”
The results also showed that SMEs used factoring in a variety of ways. For instance, some SMEs used factoring for growth within their company—for example, factoring seasonally to pay their fruit pickers. And factoring wasn’t just limited to one type of business, as revealed by the top three sectors that factored with Factris were: transportation, wholesale trade and manufacturing.
Invoices that were factored also varied immensely, from a few hundred euros up to €650.000. This demonstrates that both large and small SMEs chose factoring for their financing needs in 2019.
Continues Reaves, “The quick, easy capital from factoring invoices has presented new opportunities for SMEs across the EU, empowering them to do more than what was previously possible.”
Factris closes series A round to increase reach
Factris has concluded a EUR 5M Series-A equity funding round led by AB Ventures, the corporate venture capital arm of the Arab Bank. Current investors participating in the round included Speedinvest and Optima Investments, along with high networth investors.
Factris and NN Investment Partners agree on European financing agreement
Factris has closed a new EUR 50m secured financing agreement with asset manager NN Investment Partners (NN IP). The facility will be used to provide financing to European SMEs via the purchase of their trade-related invoices.
What is factoring?
Alternative forms of financing, like factoring, have never been more important for your business. Learn how factoring works for your SME. Factoring (or invoice financing as it’s also known) is well known to many businesses.