Already 26 000 companies use factoring. Entities associated with the Polish Factors Association serviced 41% in 2021 more entrepreneurs than a year ago. Factoring is used by more and more large and medium-sized companies and small and micro-companies. The turnover of the factors serving them is also growing. Throughout 2021, they financed the activities of domestic entrepreneurs for a total amount of PLN 362.4 billion. This means an increase in the industry’s turnover by nearly 26%. Only once in the last 10 years has it recorded greater dynamics of development.
“The factoring industry has overcome the crisis caused by the pandemic. All indicators that characterize our market returned to the appropriate levels. We are glad that the full factoring service again slightly dominates the incomplete factoring. This means that entrepreneurs try to secure their financial liquidity and reduce the risk of insolvency of contractors to whom they issue invoices. It seems that trade credit insurance combined with the financing function maybe even more important this year and in the following years. Almost all factoring companies associated with the PFA (PZF) generated a higher turnover than in the previous year. This is due to higher sales volumes for our customers, as well as increases in the prices of products and services. As a result, the industry increased its turnover in 2021 by 25%. This is the second-highest increase in the last 10 years. We recorded better only in 2018” – says Konrad Klimek, chairman of the PFA executive committee.
“Many domestic entrepreneurs coped with the recession with the help of the factoring industry. By providing them with quick financing based on the invoices they issued, we improved their functioning and competitiveness in a difficult environment. The factoring limit guarantee program, dedicated to our customers – factoring agents, which our market implements together with National Holding Bank (Bank Gospodarstwa Krajowego), was and still is significant support. The program significantly increased the flexibility of PFA members in maintaining the existing factoring limits and granting new financing under factoring with recourse and reverse factoring. That is why more and more companies use our services. We provide services not only to more large and medium-sized entities but also to small and micro-entities. An offer for them is offered not only by fintech but also by the largest and most experienced players in the factoring services market” – adds Konrad Klimek.
Financing in the form of factoring is usually chosen by production and distribution companies. As many as eight out of ten customers using factoring services come from these two groups of entities. They usually issue invoices for significant amounts and with longer payment terms, which means that funds for their day-to-day operations remain “frozen”. Factoring allows them to quickly access cash and settle current liabilities. Thanks to this, they can develop their business without any disruptions, and at the same time offer their customers attractive terms for ordering goods.
Source: Press release by the Polish Factors Association from January 27, 2022