Receivables-based financing sees rise in Europe

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17 June 2010

There has been a growth in receivables-based financing in Europe according to a report released by Demica.

Receivables-based finance is growing in Europe, with firms exploring non-traditional products such as securitisation and asset based lending, says a new research report from London-based working capital solutions provider Demica.

The report states that some 37% of European companies (UK 43%, France 39%, Germany 30%) reported that they had already monetised their receivables or payables in order to maximise the current scarcity of liquidity over the last 12 months. According to Demica, corporate financial managers are overcoming their uncertainties and discovering invoice-based finance models that can provide and free much-needed working capital.

The report predicts that finance raised on such asset categories is set to grow considerably over the next 24 months. Just under half of European firms (43%) said they planned to increase the levels of finance raised against non-traditional sources – with invoice-based finance specifically in mind. The U.K. (41%) and Germany (37%) showed much interest in developing...

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Poll

Will Russia’s recent ban on grain exports result in a significant rise in private risk insurance claims from grain traders unable to fulfil their contracts?

Yes – there will be more claims. The government’s actions allow traders, with PRI cover, to make claims through contract frustration.

No - the majority of Russia’s wheat production, some 70%-80%, is used for domestic consumption so the contracts represent only a small portion of the total wheat market, limiting the amount of potential claims.

23%

No - traders had a week’s notice before the ban allowing them to secure alternative supplies to fulfil contracts stated as optional origin.

23%

Maybe - but claims are likely to be limited to traders dealing in soft wheat whose contracts demand they source wheat only from Russia.

46%