The German Factoring Market 2020
The German factoring market in 2020:
Factoring remains stable also during the Corona pandemic
The Corona-crisis has led to the most dramatic decrease in economic growth in Germany since WW II. In 2020, the Gross Domestic Product (GDP) dropped by 4.9% to 3.3 trillion Euro. Factoring has however so far remained unaffected by this, it was even able to show some growth: The total result for 2020 (in relation to the turnover of the members of the German factoring association – Deutscher Factoring-Verband e.V.) added up to a plus of 1.3% or 279.2 trillion Euro.
According to neutral studies, the members of the German factoring association represent around 98% of the factoring market organized in associations in Germany. The figures of the German factoring association can therefore be considered the leading benchmark of the whole German factoring market.
“Due to a decrease in the GDP, the factoring ratio, which measures the relation between the volume of purchased receivables of the German factoring companies and the total GDP, increased to nearly 8.4% - a new peak value”, is the comment of Michael Menke, spokesman of the German factoring association´s executive board, on this new benchmark.
In times of the Corona-pandemic, factoring still contributed to keeping funding of enterprises and supply chains up and running: More than 82,400 clients used factoring successfully in 2020.
International factoring decreased by 2.7% in 2020 to 69 billion Euro; the decrease was particularly notable for import business which dropped by 8.1%. The export business decreased by 2.3% and now amounts to 64.7 billion Euro. In contrast, national or domestic factoring grew by 2.7% to 210.2 billion Euro in 2020, with private consumer spending in the online sector as well as growing public spending and the continuing construction business boom most likely playing a decisive roll. B2C factoring grew particularly strong (7.2 billion Euro, plus 26.5% within only one year), which may be attributed to an increase in online sales and a boom in certain parts of the medical sector.
With regard to the different forms of factoring, Inhouse-Factoring continues to dominate with 64.4% of the total turnover (minus 2% in comparison to 2019), while Full-Service-Factoring increased slightly to 25.5% (plus 0.5%).
Also in the year of this pandemic, factoring has proven to be a suitable form of financing for both small and medium sized as well as large enterprises, with a clearly visible trend towards SME clients: In terms of the number of factoring clients, by now already 95.4% of the clients are in the SME-typical turnover segment of up to 10 million Euro (2019: 93.4%).
Many of the subsequent problems of the Coronavirus-pandemic, such as the deferral of a market shake-out of de facto insolvent real economy entities, the discontinuation of state aids and of the “protective shield” for credit insurers and lower credit ratings in many industries, will most likely only become noticeable towards the end of 2021, if not only in 2022. This is also backed up by the annual outlook survey 2020/2021 amongst the association’s members: While close to 33% of all members expect a “good or very good” development and nearly 42% of the members foresee a “satisfactory” progress, 25% of the members remain rather pessimistic and foresee only “poor or unsatisfactory” developments.
Enterprises and industries wishing to pick up where they left off after a lock- or shutdown can still rely on factoring for fresh liquidity in 2021, be it in the context of stabilized or developed new supply chains or of companies in crisis or in need of restructuring.
For detailed information, please consult our current Annual Report („Jahresbericht“) for 2020 at www.factoring.de.
Deutscher Factoring-Verband e.V.
Dr. jur. Alexander M. Moseschus, Verbandsgeschäftsführer/managing director
Behrenstr. 73, 10117 Berlin
Tel.: +49-(0)30-20 654 654, Fax: +49-(0)30-20 654 656