The German factoring market in more detail

At the end of the year 2008, the leading German factoring companies associated in the German factoring Association (Deutscher Factoring-Verband e.V. - DFV) had open items/receivables against approx. 2 593 000 debitors. The number of debitors for each individual factoring company ranges from 220 to 820 000 debitors, depending on the business and industry segments served by each company.

Factoring is a modern form of financing suitable for many different, but not all industries: Factoring regularly depends on receivables resulting from purveyance, performance or services of the factoring clients towards their purchasers or consumers (debitors). Receivables subject to a defense or which result from services rendered in stages are therefore less suited for factoring.

The key industries for the German factoring industry in 2008 were: trade and trade negotiation, the food/nutrition industry, metal production and processing, manufacturing of metal products and machine construction, manufacturing of chemical products, the paper, publishing and printing industry, electronics and electronical elements, services, other manufacturing industries, the production of rubber and synthetic goods, vehicle manufacturing, the textile and clothing industry, the production of furniture, jewellery and similar goods as well as wood industry (fig. 0308).

The factoring market in Germany is not only varied due to its diversified client and debitor industries, but also due to the different forms of factoring which are on offer. Mostly, these are adapted to the individual needs and wishes of the clients, such as the amount to be financed, the maturity and collection period, the risk mitigation, the transfer of the debt management and other services offered by the factoring company. In 2008, the following forms of factoring were mostly in demand (fig. 0408, percentage in relation to total turnover):

Inhouse Factoring: With this form of factoring, the debt management remains with the factoring client who acts as escrow for the factoring company. The factoring company assumes the financing and full risk cover (for the delcredere/default case). Hence, this form of factoring is suitable for those clients who dispose of a reliable debt management of their own.

Standard- or Full Service-Factoring: This form of factoring includes the factoring company financing according to turnover as well as assuming the full risk cover (for the delcredere/default case) and the debt management.

Maturity Factoring: In the case of this form of factoring, the factoring client takes advantage of the full risk cover and debt management services without receiving immediate cash payment for the sold receivables. Maturity factoring makes financial planning easier for the factoring client as certain payment dates can be agreed upon with the factoring company. This planning reliability forms the integral part of the financing effect of this form of factoring.

Intragroup turnovers, turnovers from receivables which have not been bought and the refinancing of other factoring companies are comprised in the category "other forms of factoring".