Instant Factoring, the Romanian fintech for micro-financing small and medium-sized companies, funded 55% more customers in 2022 than in the previous year. One interesting trend emerged, however, in the way financing was distributed across industries, with real estate and IT leading the way in growth in the number of approved financing requests in 2022 versus 2021.
From day one, Instant Factoring set out to support Romanian SMEs, which are essential to economic growth and the smooth running of society. And while transport and construction companies have historically relied most on financing through factoring, this year brought significant growth in other industries as well.
Alternative financing through factoring: real estate +500% / IT up 400%
Transport and construction remained the most funded industries in 2022, but this year also brought major growth in sectors that did not traditionally rely on factoring:
- Real estate saw a 509% increase in approved financing requests compared to 2021
- IT companies had 403% more approved financing requests in 2022.
- Businesses in agriculture, forestry, and fishing also recorded 205% growth this year.
- Recreation and cultural activities saw a 104% increase in financing requests approved by Instant Factoring.
2022 was a challenging year for entrepreneurs, and the growing number of financing requests submitted throughout the year on the Instant Factoring platform showed us once again that small and medium-sized businesses in Romania need a partner they can rely on whenever they need one.
Top industries funded by Instant Factoring in 2022
- Transport
- Construction
- Wholesale & retail
Challenges Romanian SMEs faced in 2022
The challenges brought on by the war in Ukraine, along with rising fuel prices, left their mark on most industries, but Romanian entrepreneurs faced other major obstacles throughout the year as well:
- Long payment terms
Long payment terms of 45, 60, or 90 days significantly hampered operations for companies in both transport and wholesale & distribution. Long payment terms did not spare companies operating in services & manufacturing either. In that context, factoring became a lifeline for entrepreneurs, who used the cash they got instantly to pay off debts or invest in growing their business.
- Rising raw material prices
For companies in manufacturing, raw material price increases of up to 25% became the main problem after the outbreak of the war in Ukraine. Add long payment terms to that challenge and you get the picture of another industry that needed help in 2022. Companies in services & manufacturing turned to factoring and collected payment on the invoices they issued to customers faster, managing to stay afloat during a very challenging period.
- Labor shortage
Many of the industries that consistently turned to alternative financing through factoring also faced a labor shortage. Entrepreneurs collected payment on invoices faster with Instant Factoring and managed to pay salaries on time. Staff retention is also a challenge, which is why steady cash flow in the company allows employers to keep their people motivated and make sure they have the workforce they need to operate.
After the pandemic, many Romanians moved abroad again, which worsened the labor shortage and put additional pressure on companies in Romania.
How factoring helps Romanian entrepreneurs
In times of economic uncertainty, “cash is king”, and that means significant delays in invoice payments can appear, creating a dangerous spiral for the economy: Company X does not collect payment on its invoices from Company Y, which means it cannot pay Company Z for services, a chain reaction that can ultimately lead to a widespread deadlock.
Entrepreneurs choose Instant Factoring to collect their invoices faster and make sure they have the money they need for:
- Investments & business development
- Paying off debts
- Keeping employees motivated
- Renegotiating contracts with suppliers
Don’t wait. Collect cash on your issued invoices instantly and start the year ahead.
For the second year in a row, Instant Factoring is the best digital factoring platform in Central and Eastern Europe, so your business is in good hands. If you have questions about alternative financing through factoring, don’t hesitate to contact us.
Turn an issued invoice into cash in 24h.
You focus on your business, we support your cash flow. Collect cash from your issued invoices instantly, without waiting 30, 60, 90, or 120 days until the payment term.
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