Receivables financing enables sustainable and competitive funding for the growth of private equity portfolio companies. However, factoring is still not systematically assessed, sometimes due to a lack of awareness of its benefits. With 4 out of 5 transactions carried out for companies under LBO, Fibus is Europe’s leading specialised advisory firm. Maxime Bertin and Romain Chaufour, Deputy Managing Director and Director respectively, share their best practices.
DECIDEURS. How do you assess the evolution of receivables financing usage in private equity in 2025?
Maxime Bertin. We have observed two main trends since 2024. On one hand, some funds continue to actively push for a factoring solution at acquisition or very shortly after closing, in order to optimise cash flow and accelerate portfolio company growth. On the other hand, some transactions are now arriving in a stressed situation, where factoring becomes an emergency solution rather than a planned strategic tool. Certain sectors have been under pressure over the past 18 months, requiring additional working capital financing or support in securing acquisition debt repayment.
Romain Chaufour. As deal activity has not yet returned to 2021–2022 levels, some funds are focusing on their existing portfolio companies. Over the past year, we have often worked on assets acquired several years ago, either to implement new facilities or optimise existing programmes. The objective is to maximise cash generation and capture bolt-on acquisition opportunities, under attractive financing conditions. We continue our educational work on this financing tool, as in some cases it is still perceived as a distress funding instrument. Yet since 2017, it has been the leading short-term financing solution for companies, ahead of overdrafts. This demonstrates its adaptability across multiple contexts.
Are there specific factoring structures particularly suited to funds?
R.C. In most of our engagements, contracts are undisclosed and non-recourse, and compliant with senior debt agreements. They help optimise financial ratios and balance sheet metrics, and in some cases reduce the cost of senior debt through improved leverage ratios.
M.B. It is a flexible and adaptable financing tool that can support both business growth and operational stability in more uncertain periods. It also requires credit risk coverage on receivables, helping secure margins – particularly for companies operating internationally.
What are the key takeaways for private equity funds?
M.B. The first lesson is that receivables financing should not be treated as a last-resort solution. Too many funds still only consider it when a company is already under liquidity pressure, whereas significantly better terms could have been achieved – and difficulties avoided – if addressed earlier.
R.C. We also see that factors remain dynamic but increasingly selective. A well-structured and well-prepared case is essential to secure optimal terms. In addition, syndication between factors is becoming more frequent, particularly for larger facilities. This increases complexity but also opens new opportunities for well-prepared companies.
How are French factors positioned in Europe and North America?
M.B. French factors are among the most efficient in the market. They have successfully exported their expertise across Europe and the United States, enabling clients to benefit from integrated cross-border solutions. This trend is accelerating, supported by more advanced technology platforms that facilitate multi-country financing – particularly our proprietary receivables financing management tool, ARI.
R.C. International activity represents 37% of volumes financed by French factors and is the main growth driver, notably through US subsidiaries of European groups and European subsidiaries of US groups. This is excellent news for funds looking to structure financing across international platforms.
What advice would you give to funds optimising their financing strategy in 2025?
M.B. Anticipation remains key. A fund that considers this financing solution from the acquisition phase benefits from significantly stronger negotiating power. We also recommend treating factoring as a structural portfolio component rather than a one-off solution. Some funds systematically assess it across all holdings – this is a strategic approach that delivers strong results.
R.C. It is also essential to rely on the right tools. At Fibus, we have developed ARI, which enables finance teams to manage their factoring programmes and maximise available funding. In a period of economic tightening, every liquidity source matters, and funds must ensure their portfolio companies fully optimise existing facilities.
What are the specific challenges for the French market in 2025?
M.B. The decline in interest rates over the past 18 months creates a favourable window for implementing these financing structures. In France, pricing is currently around 1% to 2% above benchmark rates for non-recourse factoring programmes, which remains highly competitive. We expect further carve-out transactions, as groups divest non-core assets. These transactions often require factoring facilities to replace former cash pooling arrangements. Factoring thus becomes a key instrument to ensure financial independence.
R.C. We also anticipate increased demand for programme extensions. Many companies are now seeking to include additional countries within their factoring structures, sometimes switching factors to optimise funding levels. This reflects a broader awareness of the importance of properly structuring financing early.
Final message to financial decision-makers?
M.B. Receivables financing is a powerful growth funding tool, but also a means of securing operations. The earlier it is implemented, the better the terms – and the stronger the protection against uncertainty. Funds should embed this thinking from the outset.
R.C. We always find solutions, but they are more constrained when requests are made under urgency. In 2025 and 2026, anticipation will make all the difference.
Source: Décideurs Corporate Finance