At the end of 2022, companies still face the global crises. The war in Ukraine, the resulting energy crisis, the effects of COVID-19, the still struggling supply chains, and the significantly increasing interest rate levels are forcing companies to rethink and to be highly agile. Despite solid planning and well-thought-out decisions, financing security seems to have become an even more short-lived attribute. In addition to the major operational challenges, the negative impact of the ongoing global crises on liquidity is becoming increasingly visible.
In addition to managing costs, capital expenditures and financing, optimizing working capital is a key element in securing liquidity. Working capital finance can be used for this purpose on the asset as well as the liabilities side of the balance sheet, optimizing the company’s cash flow selectively and on an ongoing basis. Both the sale of receivables (single risks or portfolio) on the asset side and supply chain finance on the liabilities side have established themselves as solid possibilities of a balanced financing mix.
Companies rely on the flexible use of financing instruments to be able to manage their business long term as well as short term. In addition to flexibility, the digitization of financing processes remains at the top of the agenda. Manual processes must continue to be minimized for the optimal use of resources. In addition, globally active companies want scalable programs that map different jurisdictions, but also provide financing security through the integration of a variety of relationship banks and investors, as well as allow for competitive pricing that arises from supply and demand.
In the past 10 years, the market has changed significantly due to digital offerings. Many platforms have emerged in the area of working capital finance, and we are currently seeing the market consolidate. The successful marketplaces offer finance managers not only the digitalization of their own processes, but above all flexibility and security in the financing of working capital. If a company wants to be well positioned for the future, it must maintain its relationships with existing financing partners, but also equip itself by integrating with platforms on which institutional investors and factoring companies are present in addition to banks. We are currently seeing strong interest in flexible financing offers. Companies are repositioning themselves and want to understand and access the new opportunities and their benefits. Those who recognized the opportunities of digital offerings from platforms early on are already benefiting by expanding established programs in the payables and receivables area in line with demand, thus steering the corporate ship more safely through stormy seas.