Specialized Financing reinforces growth in the first semester of 2017
- Factoring grows almost 15 per cent;
- Renting increases production by 6.3 per cent;
- Leasing registers a 5 per cent growth.
The use of specialized financing instruments has reinforced the tendency of growth in the first semester of 2017, according to the most recent estimates of the Portuguese Association of Leasing, Factoring and Renting (ALF).
In this time period, the total turnover for Factoring institutions members of ALF was 12.8 billion euros, with a growth of 14.7 per cent, corresponding to more 1.6 billion euros than the previous year. Domestic Factoring registered a production over 6.2 billion euros, while international activity (import and export) totaled 2.4 billion euros. Regarding Confirming – in which the Factor pays the suppliers of its client with the possibility to provide advances – the total estimated factoring volume was 4.1 billion euros.
“In the first six months of the year only, Factoring reached a value equivalent to 13.5 per cent of the Portuguese GDP which signifies that ever more companies recognize in this financing tool a whole range of highly value-adding services” stated Rui Esteves, ALF’s Vice-President in charge of Factoring also highlighting concrete benefits like “transforming invoices into liquidity, simplifying credit management operations, outsourcing collections management and commercial risk coverage, including in exports”.
The Renting sector ended the semester with a total of 14.695 vehicles purchased and a growth of 6.9 per cent in relation with the previous year and corresponding to a production value of 277 million euros, 6.3 per cent more. At the end of the first semester, the passenger and commercial fleet managed by Rentings was composed of 102.662 vehicles, valued at 1.5 billion euros, representing an increase of 8.8 per cent and 13.8 percent, respectively.
According to António Oliveira Martins, ALF’s Vice-President with the responsibility of this sector, “Renting is nowadays one of the main access points to automotive mobility, allowing the transformation of variable costs into fixed ones, improving financial planning and promoting a higher usage of electric and hybrid vehicles. Also, in the case of consumers, it is perfectly proven today that a vehicle can be more cost-effective and convenient through Renting since it includes all the necessary services to circulate and be kept well-maintained.” Furthermore, the client benefits from the economies of scale and from a contractual flexibility which adapts to his specific needs”.
Regarding Leasing, this sector registered an estimated growth of 4.7 per cent, totaling a level of support to national investment of 1.28 billion euros, between January and June of 2017. This evolution was marked by an estimated increase of 4.8 per cent in Equipment Leasing, with a corresponding production value of 890.5 million euros, in particular vehicles (597.8 million euros) and equipment/machinery (292.7 million euros). Real estate financial leasing production registered and increase of 4.4 per cent with a total value of 395.2 million euros.
“The growth that Leasing shows is one more indicator of the recovery in businessmen’s trust in the Portuguese economy since this type of financing is intended to investments in productive assets and tends to react quite rapidly to the variations in the economy”, states Eduardo Moradas, ALF’s Board Member in charge of Leasing, adding that “Leasing can finance all types of assets, be them movable (vehicles, equipment, etc.), be them real estate (warehouses, offices, hotels, etc.).” Additionally according to the same manager, “the use of Leasing in Portugal is getting closer to the levels shown by more developed European countries due to this tool for investment being quite flexible and efficient from a fiscal viewpoint”.
Para Paulo Pinheiro, Presidente da ALF, “a expectativa para os restantes seis meses de 2017 é que as três soluções continuem a crescer a um ritmo idêntico ao do 1º semestre, consolidando-se cada vez mais como os melhores instrumentos de financiamento do investimento produtivo e de apoio à tesouraria quer para grandes empresas quer para PME, um segmento de mercado que aposta cada vez mais nos serviços oferecidos pelos associados da ALF”.
According to Paulo Pinheiro, ALF’s President, “the expectation for the remaining six months of 2017 is that the three solutions will continue to grow at a similar pace as seen in the first semester, consolidating themselves ever more as the best financing tools for productive investment and for cash-flow support both for big companies and SME’s, a market segment which bets more and more in the services offered by ALF’s members”.
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