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The receivables finance industry needs to be front and centre in the efforts to achieve a swift and sustainable recovery from COVID-19.

In times of crisis it has always been so – businesses gravitate to the funding sources they can rely on and trust. Invariably that means a surge in the demand for receivables finance. In response to this demand, EQ Riskfactor have launched the Receivables Finance Global Outlook report series to ensure you have the insights, information and expertise you need, to deliver for clients and to support the global economic resurgence.

The emerging insights we provide are unrivalled in-depth or value – based on an original research programme we conducted across the UK, US, Germany, France and the Netherlands – our reports include exclusive insights and expert views of senior leaders in receivables and trade finance, credit, compliance, fraud and risk.

This first report focuses on the changes in demand that receivables finance leaders saw during 2020, their revenue predictions for 2021 and their main strategic priorities moving forward. Each quarter, the report will explore different aspects of the study, revisiting views, opinions and analysis as we see how the longer-term impact of COVID-19 emerges over the coming months.

Michael Ellis,
Managing Director EQ Riskfactor

Shifting Demand


We asked professionals in the receivables finance industry how they had seen demand change for new receivables finance facilities following the onset of the pandemic, and there were some marked differences across countries. In the US, while 57% of respondents saw a demand decrease to some degree, 40% reported an increase – with almost a quarter (22%) seeing up to 50% more demand. Conversely, in the UK, only 30% saw an increase, with the majority seeing growth of 10% or less. Similar to the US, 58% of UK professionals in the industry saw a demand decrease.

Change in Demand Following COVID-19


Within Europe, responses also varied. The Netherlands saw a significant 68% increase, compared to 52% in France and 48% in Germany. Decreases across the three countries were 20%, 36% and 40% respectively. Across the board, a far fewer number of respondents saw no change in demand.

The strong demand in the Netherlands in particular – and France to some extent – can be attributed to the continuation of an existing growth trajectory prior to and through 2020. The French market is very mixed in segments. It focused on SMEs from the 1970s to the 1990’s, but has evolved towards the large corporate segment since the early 2000s. That explains why, being among the leading markets in number of clients, it became the European leader in volume during the last two years. This is a trend that we’ve seen amongst established players in the UK and the Netherlands, who segment their positioning in terms of both product and marketing to capitalise on the increased demand from the corporate sector.

“The Netherlands factoring market is similarly more corporate-focused, and the corporate market has been particularly resilient during the COVID-19 period.” Says Peter Mulroy of FCI.

“The receivables finance asset-based lending markets in the UK are relatively large and well developed so a small relative change can make a big difference,” adds Matthew Davies from UK Finance.


The Netherlands factoring market is more corporate-focused, and the corporate market was particularly strong.
Peter Mulroy, FCI

In times of crisis, traditional credit lines gravitate towards a receivables finance and/or asset-based working capital structure.
John De Pledge, Leumi Business Credit


The sudden and dramatic change into lockdown across the globe was something we’ve never seen before. Despite the robust business continuity plans of many organisations, nothing could have prepared them for what was about to emerge. Depending on their sector and the adaptability built into their work processes, some businesses were able to mobilise for remote working better than others. Nevertheless, the need for rapid government intervention across the globe was crucial to avoid business failure and job redundancies on a mass scale. As these stimulus plans had to be initiated quickly and with little warning, governments needed to evolve them over time and continually adapt their strategy to support as wide a range of industries as possible.

Looking at the survey figures in context of the above, the current drop in UK demand could in part be attributed to government business support in the form of the government lending schemes and other interventions. “While the government was right to act quickly to bolster businesses and the economy, and enable them to cope with the initial shock of the pandemic and subsequent lockdowns, this has created some distortions within the commercial finance market, between both institutions and products. And this has impacted receivables finance and asset-based lending, plus many other types of commercial finance,” comments Matthew Davies from UK Finance. However, this may at least be partly counteracted by post-pandemic revenue expectations, where the UK saw the greatest optimism in Europe – something we discuss in the following section.

US optimism is likely triggered by the news of its own huge economic stimulus, which could run into trillions of dollars1. John De Pledge from Leumi Business Credit observes, “In times of crisis, as risk organisations tighten credit, traditional credit lines gravitate towards a receivables finance and/or asset based working capital structure, so there’s been an increase in business.”


On a general note, COVID-19 has brought both its own challenges and opportunities. Globally we have seen a downgrade in credit quality across the board. This has created the need for lenders to keep a much closer eye on managing the associated risks of clients – particularly those that were not performing well, even before the pandemic.

On the upside, COVID-19 creates the opportunity to onboard strong businesses which may have not previously considered receivables finance but need a credit solution for a short-term cash flow issue. These same businesses may want to form longer-term credit relationships to support future growth. As a leading global technology provider into the industry, this new uptake is something we have seen first-hand across the markets we operate in.

There are substantial opportunities for invoice finance and asset-based lending. For growing businesses there are no better finance products. They free up working capital, track the growth of the business, and allow for further expansion. They are the perfect product to support the economic recovery.
Matthew Davies, UK Finance

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Return to market confidence

The UK has a fundamentally strong and vibrant economy. Invoice finance and asset-based lending can help drive the recovery.
Matthew Davies, UK Finance






We asked our respondents about their revenue expectations in a post-pandemic environment. Globally, the response was extremely positive with 81% predicting revenue growth. Of these, 19% predicted significant growth and 62% slight growth. This reflects the confidence of lenders that 2021 will be a turning point in what has been a tumultuous time for many of their clients.

Again, responses in our survey varied quite considerably between countries. In Europe, Germany and France predictions were similar – with 60% forecasting growth and 12% predicting a slight decrease. France was the only country surveyed where some professionals predicted a ‘significant’ decrease at 4%. The Netherlands had the most optimistic outlook of our European respondents, with 80% predicting revenue growth and just 4% forecasting a decrease. EQ Riskfactor has observed that this is a market where both large banks and new entrants are promoting receivables finance products and investing in scalable business models.

Revenue Expectations for 2021



Interestingly, while being the most bearish about post-COVID demand as shown earlier, 88% of UK professionals forecast revenue growth and it was the only country surveyed where no-one predicted a decrease. This suggests how well-placed receivables finance is to help businesses access cash flow during the recovery, and the distortions – created by the much-needed government support scheme when the pandemic first took hold – normalise.

“This is the flipside to what we saw in the drop in demand,” says Mathew Davies. “The UK was hit perhaps more significantly than other markets initially, but it has a fundamentally strong and vibrant economy. Invoice finance and asset-based lending can help drive the recovery – and as far as the industry is concerned, there remains a lot of potential to grow back quickly and to provide more finance to more businesses.” 

US respondents were also bullish, with 96% predicting revenue growth and only 2% forecasting a decrease. This is most likely due to the huge US stimulus plan, plus a further stimulus called the Payback Protection Program which has certain loan payback forgiveness measures built in. Bank Leumi is involved in the programme. And as John De Pledge explains, “The last US employment furlough program ended in the fall. There is a lot of pressure to have a second round and the feeling is it will be targeted at SMEs, which make up a large part of the US economy.”

   Future outlook
In an FCI poll conducted in September 2020, 85% of respondents believed that the factoring and receivables finance industry would emerge from the pandemic stronger, with the potential to increase global volume at the same level of 9% compound annual growth rate (CAGR) experienced over the past two decades.

Key factors when preparing for growth

I think there will be challenges around reputational risk."
Matthew Davies, UK Finance


We asked receivables finance leaders what their top business priorities are moving forward.

The top three in order were:
1.  The deployment of artificial intelligence (AI) and machine learning (38% globally)
2.  Improving the ability to innovate (37% globally)
3.  Recruitment, development and retention of employees (34% globally)

Again, country-wise, priorities varied widely. In the UK, technology and innovation were the main theme, with the ability to innovate (46%), AI and machine learning (42%) and digital customer onboarding (36%). The need to minimise costs was also at 36%.


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Digital onboarding will be a must-have, not just nice-to-have

Reputational risk and treating clients fairly are key considerations for all financial services providers”
Matthew Davies, UK Finance



As a result of the pandemic, businesses across many different sectors have accelerated their plans for digitalisation to continue providing service to their customers. Consumers have already become accustomed to receiving fast and efficient service online, and their expectations in this area are rising. In the US, AI and machine learning was a top priority (45%), with digital customer onboarding, and recruitment, development and retention (hereafter ‘recruitment’) both weighing in at 37%.

Technology was far lower on our leaders’ agenda for both France and the Netherlands. France respondents prioritised recruitment (40%) and minimising costs (32%). In the Netherlands, innovation topped the list (48%) – higher than any other country. Like France, recruitment was also a priority in the Netherlands (40%). Interestingly, in Germany, mitigating regulatory and reputational risk was one of the top priorities (40%), just below AI and machine learning (44%).


The responses as shown demonstrate how closely our respondents are aligned to future market demands. As the below box shows, digital customer onboarding, for example, will become an increasing priority globally moving forward and EQ Riskfactor is releasing its own onboarding portal. As time goes on, lenders that do not adopt a strong digital onboarding process could be at a major disadvantage because of their higher customer acquisition costs, and we are already seeing the uptake. Even now, financiers are finding they are competing with fintech companies. Whilst early adopters will be perceived as the initial winners, it is the lenders who place emphasis on the quality and flexibility of their systems that will be the longer term winners. To maximise conversion and competitive advantage lenders must adapt and continually improve the sales messaging, the applicant’s customer journey and the digital credit criteria.


   AI and digital onboarding
AI-enabled digital onboarding is increasingly seen as a way of enhancing the customer journey, and at EQ Riskfactor we are seeing a palpable demand from clients that want to digitise their onboarding processes. Lenders can show clients the data as it stands today – but also future predictions through machine learning. For prospects with a similar profile to customers whose applications have already been approved, AI can speed up the decision-making and approvals process. From the conversations we are having with our global clients, we consider that even in the immediate future, digital onboarding will be a must-have, not just nice-to-have.



EQ Riskfactor is also helping many long-standing clients move their data analytics systems from on-premises to the cloud. This is giving them connectability and data sharing advantages within a completely secure network.

John De Pledge adds: “We have laid out a number of technical priorities, which include the ability to access financial and collateral information directly from clients’ systems. This is mutually beneficial for us and our clients. The efficiency with these technological advances saves time and resources while reducing overheads.”


Recruitment, development and retention will continue to grow, so lenders can upskill and get maximum employee value. Many trade associations, lending institutions and technology suppliers – including EQ Riskfactor – have launched their own academies along with extensive on-the-job training programmes.

Mitigating regulatory and reputational risk was another key priority, particularly in Germany and the US. “I think reputational risk and treating clients fairly are key considerations for all financial services providers,” adds Matthew Davies. “Regrettably, as government stimuli and interest-free periods end, there will inevitably be business failures. It is important for the tax-payer that as much funding as possible is recovered, but it is crucial that these situations are handled appropriately.”

   FCI findings
In a survey conducted by FCI in late 2020, 97% of professionals felt that COVID-19 would accelerate the adoption of digital technologies and that they would be increasing their IT investments.

   Using AI for fraud prevention
In a recent FCI survey, 80% of factoring professionals anticipate a significant increase in fraudulent transactions and a rise in bankruptcy risk in the coming year. Very often this behaviour is not borne from malice – more from the need of a struggling business to manipulate its figures to gain the needed credit to balance the needs of its employees, suppliers, the bank and other stakeholders. Often, the business may not be explicitly aware that its actions are potentially fraudulent.

Nevertheless, it is a reality and something that needs to be at the forefront of lenders’ minds – particularly in times of business hardship. Through risk analytics, lenders can identify current trends, while AI uses predictive models to identify future behaviours. Combined with data from credit bureaus (and other sources), lenders can then gather the ‘bigger picture’ and protect themselves from fraud risk.

Woman With Mask

Positive prognosis ahead

Our respondents’ positivity about the future reflects confidence within the receivables finance industry






The impending pressures on businesses and the wider economy is well-publicised within the global news and media. In the receivables finance industry, for example, it has been long acknowledged that the pre-COVID stability of the economy supported a large number of “zombie” businesses - those on the brink of closure with limited growth aspirations, that metaphorically limp on.

The economic crisis will no doubt result in business failures and job losses. Euler Hermes even identified back in July 2020 that its global insolvency index is likely to hit a record high of +35% by 2021, triggered by the conclusion of government support schemes. Not only will this affect sectors such as hospitality and retail directly, but also those within the wider supply chain for those industries, and also other businesses that depend on consumer and business confidence.

Despite the inevitably rocky road ahead, the testing conditions of the pandemic business landscape have generated growth opportunities for brand new businesses and for those adapting quickly to their circumstances. Our respondents’ positivity about the future reflects confidence within the receivables finance industry once the economy begins its recovery. The final remaining unknown at this point, is when that will be.

As 2021 progresses it will be interesting to see how real events will unfold – all of which will be captured in the EQ Riskfactor Receivables Finance Global Outlook.

We would like to thank our external contributors who have brought their valuable insights to this report. Their insights have added valuable context to our own research and findings, and we appreciate their involvement:

  • • Peter Mulroy, Secretary General, FCI
  • • Matthew Davies, Head of Asset-based Lending of UK trade body, UK Finance
  • • John De Pledge, Head of Asset-based Lending, Leumi Business Credit – a division of Leumi Bank USA and Immediate Past (2020) President of The Secured Finance Network

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