Modern office Buildings in Frankfurt, Germany Modern office Buildings in Frankfurt, Germany | © Getty Images/Westend61

Factoring & Leasing

Factoring

Factoring is a flexible and bank-independent concept for corporate financing. Liquidity is ensured through the ongoing sale of cash receivables from goods, deliveries and services.
In 2020, factoring volume in Germany was EUR 279.2 billion. The factoring ratio reached 8.4 percent. This also indicates that Germany has significant growth potential in comparison to other countries that are reaching market saturation (Belgium 18%, Spain 16%, France 14%).

Factoring in Germany - Industry Shares in Factoring (2020, in %)
Factoring in Germany - Industry Shares in Factoring (2020, in %) | © Deutscher Factoring Verband e.V.

Factoring is a particularly well established SME financing instrument in Germany. It is also one that is increasingly used by companies of all sizes in times of crisis like the current coronavirus pandemic. More than 95 percent of SMES are currently served in the segment up to EUR 10 million in factoring revenue. Small-ticket factoring recorded an annual increase of more than nine percent to rise to 28.8 percent for volumes up to EUR 10 million. Big-ticket items with an outstanding balance of receivables of EUR 50 million and more accounts for over 50 percent of reported revenue volume.

Source: Deutscher Factoring Verband e.V. [German]

Leasing

The leasing sector is Germany’s largest investor, generating annual investment volume of EUR 74.4 billion in 2019. The leasing share of equipment investment is 24.0 percent. Within Europe, Germany is in joint leading position with the UK.

Leasing in Germany - Major Leasing Markets in Europe (New Business – Leasing and Lease Purchase in EUR bn)
Leasing in Germany - Major Leasing Markets in Europe (New Business – Leasing and Lease Purchase in EUR bn) | © Bundesverband Deutscher Leasing-Unternehmen e. V. (BDL)

Small and medium-sized enterprises are important leasing clients.

The most important leasing clients are service companies (40%) and companies in the manufacturing sector (17%). Private households account for around 11 percent of leasing volume.

Source: The Bundesverband Deutscher Leasingunternehmen e.V. (BDL)

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