INTERNATIONAL FACTORING: FINANCE, SECURE AND STRUCTURE YOUR GROWTH ABROAD
In an environment shaped by longer payment terms, rising non-payment risks, pressure on supply chains and increasing strain on operating cycles, international factoring has become a genuine growth management tool, far beyond its traditional role as a short-term financing solution.
The figures confirm that French mid-market companies play a central role in the economy and in the country’s export performance. They are also regarded as strategic players in France’s reindustrialisation and foreign trade ambitions.
In this context, factoring for mid-market companies operating internationally becomes a key lever for converting commercial growth into growth that is genuinely financeable, manageable and sustainable.
As Michael Di Sangro explains in the podcast dedicated to factoring solutions for mid-market companies:
The factoring solutions we implement with them are tools designed to support their growth and contribute, at our level, to their development.”
Mid-market companies: a driving force behind the French economy and international expansion
Mid-market companies are one of the strongest pillars of the French productive economy. Their profile is particularly well suited to exports: they are often industrial, innovative, deeply rooted in their local regions, and capable of positioning themselves in demanding international markets.
According to Business France, French SMEs and mid-market companies generated around €280 billion in exports in 2024, representing nearly 47% of French goods exports. The number of French companies active internationally also increased, reaching 151,200 operators, up 5%, driven by the arrival of 44,500 new exporters.
The European Union remains their leading development region, accounting for 53% of SME and mid-market exports, with Germany, Belgium, Spain and Italy as key partners. The United States and the United Kingdom each represent around 7% of their exports.
This momentum confirms a strong trend: for mid-market companies, internationalisation is no longer simply a commercial opportunity, but a structural component of their growth model. However, this international expansion comes with a very tangible operational reality. Selling abroad often means financing a longer operating cycle, managing customers across multiple countries, dealing with different currencies, absorbing longer payment terms and securing receivables that may be more complex to collect. This is precisely where international factoring for mid-market companies becomes fully relevant.
International growth first creates a cash-flow requirement
This is one of the most common paradoxes for mid-market companies: the more international sales grow, the greater the working capital requirement becomes.
An export order may be profitable on paper, but it can create significant cash-flow pressure if the company must finance purchases, production, logistics, inventory, payroll or international transport costs upfront, before receiving payment from the end customer.
Payment delays remain a major issue. The 2024 report from the French Payment Terms Observatory indicates that nearly 30% of companies, excluding micro-enterprises, still pay or are paid beyond the statutory deadline. The French Ministry of the Economy also highlights that, at the end of 2024, the average payment delay stood at 13.6 days, above the European average, with particularly pronounced delays among companies with more than 1,000 employees.
For an exporting mid-market company, this reality is even more sensitive. Payment terms can vary significantly depending on the country, local commercial practices, debtor quality, sector-specific payment habits and applicable legal frameworks. In some markets, payment periods may significantly exceed French standards.
The challenge is therefore not only to sell internationally, but to remain financially resilient until cash is collected.
Factoring: a direct response to export working capital needs
Factoring is based on a simple principle: the company assigns its customer invoices to a factor, which advances all or part of the amount of those receivables. For a mid-market company, this makes it possible to convert invoices into immediately available cash, without waiting for the customer’s payment due date.
In an international context, this solution addresses several key challenges:
• Financing export working capital requirements;
• Accelerating cash collection;
• Securing international trade receivables;
• Better managing payment delays;
• Supporting growth in foreign sales;
• Financing international subsidiaries;
• Preserving traditional bank credit lines.
One of the major advantages of factoring for mid-market companies lies in its scalability: financing capacity evolves in line with turnover. The more the company invoices, the more receivables it can mobilise.
This logic is particularly relevant for industrial mid-market companies, seasonal businesses, fast-growing groups or companies pursuing an international expansion strategy.
Market data confirms this growing momentum. In 2024, French factors handled €430.9 billion in invoices, representing 14.8% of French GDP. Mid-market companies now account for nearly 45% of outstanding amounts held by the factoring industry, demonstrating that factoring addresses a structural financing need rather than a purely cyclical constraint.
For mid-market companies operating abroad, international factoring becomes even more relevant when designed as a group-wide programme.
A mid-market company selling into several countries or operating international subsidiaries must manage simultaneously:
• Export receivables;
• Customers located in different legal environments;
• Invoices sometimes denominated in foreign currencies;
• Payment terms that vary from one market to another;
• International non-payment risks;
• Local financing needs;
• Consolidated reporting of trade receivables.
In this context, export factoring, multi-country factoring and pan-European factoring programmes make it possible to structure a consistent response at group level. This confirms that companies are no longer looking solely for one-off financing. They are seeking a solution capable of supporting their international development, securing their receivables portfolio and providing greater visibility over consolidated cash flow.
The two-factor model: a solution tailored to export receivables
One of the most relevant structures for international transactions is the two-factor model. It generally involves one factor in the exporter’s country and another factor in the buyer’s country.
This arrangement makes it possible to combine:
• Invoice financing;
• Local knowledge of the debtor;
• Collection in the buyer’s country;
• Protection against non-payment risk;
• Local legal expertise;
• Support for the international customer relationship.
According to FCI, the European factoring market remains the largest in the world, representing around 66% of the global market. In Europe, non-recourse factoring accounted for 53% of the market in 2023, showing that companies are increasingly seeking debtor risk protection solutions, not merely financing.
This trend is essential for exporting mid-market companies. When expanding into new markets, they must constantly strike the right balance between commercial development and risk control. International factoring enables them to move forward with greater confidence by reducing exposure to unpaid invoices and improving the predictability of cash flows.
Managing foreign subsidiaries with a consolidated view
For a mid-market company already established outside France, the challenge is not only to finance export sales from the parent company. It is also about managing subsidiary cash flows, consolidating outstanding receivables and harmonising financing practices across the group.
A multi-country factoring programme can help centralise information, improve visibility for the Chief Financial Officer, rationalise costs and secure flows between France and foreign subsidiaries.
Michael Di Sangro emphasises this group-wide dimension:
This centralisation, in addition to being financially beneficial, makes it easier for the CFO to manage subsidiary cash flows, with a consolidated view of the French contract and its subsidiaries.”
In a context where mid-market companies must combine export growth, risk control, working capital optimisation and compliance with bank covenants, this consolidated approach becomes a genuine strategic advantage.
A risk mitigation tool, but also a financial optimisation lever
Another strength of factoring, often less visible in public debate, lies in its potential impact on the company’s financial structure.
In certain structures, subject to compliance with applicable accounting criteria and validation by statutory auditors, assigned receivables may be derecognised from the balance sheet. For a mid-market company pursuing an investment strategy, an external growth transaction, the opening of a subsidiary or an LBO, this effect can be significant.
It may help to:
• Reduce trade receivables on the balance sheet;
• Improve certain financial ratios;
• Preserve borrowing capacity;
• Allocate bank credit lines to other strategic projects;
• Strengthen the group’s financial profile;
• Support international investment.
As Michael Di Sangro explains in the podcast:
By setting up derecognition-driven contracts, mid-market companies can remove assigned receivables from their balance sheet presentation, helping to improve their financial autonomy ratio.”
This dimension is particularly important for mid-market companies that need to finance their operating cycle, commercial development, industrial investments and international expansion simultaneously.
For mid-market companies, succeeding internationally is not only about signing new contracts. It also means financing longer cycles, absorbing payment delays, securing foreign customers, managing subsidiaries and preserving the financial strength of the group.
Ultimately, international factoring for mid-market companies delivers five very tangible benefits to French businesses operating or expanding abroad:
- Reducing pressure on export working capital requirements
- Accelerating available cash flow
- Securing export receivables
- Managing subsidiaries through a group-wide approach
- Optimising the financial structure
At a time when companies must combine international ambition, financial discipline and speed of execution, factoring stands out as a comprehensive lever: it finances, secures, structures and supports growth.
Above all, it enables every mid-market company expanding abroad to achieve a critical objective: transforming commercial growth into growth that is financeable, manageable and sustainable.
To find out more, listen to the Societe Generale Factoring podcast dedicated to factoring as a development lever for mid-sized companies.