WITHOUT CASH, GROWTH REMAINS THEORETICAL

2026/06/18
For the CEO or CFO of a mid-sized company, working capital requirement is not merely a technical indicator, it is a prerequisite for growth. Converting trade receivables into available cash gives a company the means to act, invest and accelerate. Many mid-sized companies face the same paradox: they win new contracts, build up strong order books, yet see their cash position come under pressure. When cash flow slows, growth inevitably slows with it. This is precisely where factoring takes on a broader role. It should not be viewed simply as a short-term financing solution, but as a management tool that supports execution, secures accounts receivable and helps drive business expansion.

Working capital requirements for mid-sized companies: why cash flow timing has become strategic

At its core, the issue is not just revenue. The real issue is how long it takes to convert that revenue into cash. In France, the legal framework generally sets a maximum payment term of 60 days from the invoice issue date, or 45 days end of month where this has been contractually agreed. Yet by the end of 2024, the average payment delay in France had reached 13.6 days, up one day year on year, rising to 18 days among companies with more than 1,000 employees.

For a mid-sized company, these days of delay are never insignificant. They represent purchases that need to be made, payroll obligations that must be met, investments that have to be prioritised, and growth phases that need to be financed.


Factoring: converting trade receivables into available cash

Factoring enables companies to assign trade receivables in exchange for early financing, without waiting for the invoices to reach maturity. The Banque de France notes that factoring makes it possible to convert a dormant asset, the invoice, into immediate liquidity, with financing typically amounting to 85% to 95% of the receivables assigned.

Depending on the company’s needs, several solutions may be used: traditional factoring, confidential factoring, export factoring, off-balance-sheet factoring, or pan-European programmes for groups with multiple subsidiaries.

Depending on the contract, factoring may also include collections management and protection against the risk of non-payment.

In other words, an invoice no longer has to remain an idle asset. It can become an immediately available resource to keep the business moving. The latest ASF figures confirm this: in 2025, French factoring companies handled €439.4 billion in receivables, representing nearly 87.8 million invoices financed or managed. Even with moderate growth of +1.9%, factoring continues to confirm its role in short-term corporate financing.

The trend is even more pronounced internationally, with €169.1 billion in transactions in 2025, up +5.0%. For mid-sized companies exposed to export markets, long business cycles or foreign subsidiaries, this figure clearly illustrates the value of factoring: it provides liquidity, but also greater visibility and consistency in cash management.

These figures show that factoring is no longer a last resort financing tool, but a management lever embedded in financial strategy, particularly for companies looking to absorb growth, secure their receivables and manage cash flow more effectively.


Financing working capital requirements: a factoring solution aligned with mid-sized companies’ growth

What makes factoring particularly powerful for a mid-sized company is that it evolves in line with actual business activity. Whereas more traditional credit facilities are often based on a snapshot of past performance, factoring follows the flow of invoicing. It therefore supports growth, seasonality and rising volumes more naturally.

This approach is all the more useful in a still challenging economic environment. At the end of March 2025, the Banque de France recorded 66,379 business failures over a rolling twelve-month period, a level above the pre-crisis average. Failures among mid-sized and large companies had stabilised but remained above their pre-pandemic level. In this context, smoother cash flow becomes a key factor of resilience.


Cash flow management: how factoring gives companies greater visibility

The real question is not only: How much can I finance? The real question is: When will cash be available to support the business? For a mid-sized company, this is decisive. Between purchasing, production, delivery, invoicing and customer payment, cash can remain tied up for several weeks, sometimes several months.

ASF data show that the average payment period in factoring stood at 54.3 days in 2024, with 52.2 days for domestic transactions and 57.7 days for international transactions. The challenge therefore goes beyond financing: factoring also provides a clearer management framework, enabling companies to anticipate their needs and make more secure decisions.

In a mid-sized company, growth is not driven solely by the order book. It also depends on the ability to finance the gap between today’s production effort and tomorrow’s cash collection. Factoring acts precisely at this point. It frees up cash flow to purchase, produce, recruit, invest and accelerate.

For a growing mid-sized company, factoring is far more than a financial tool,  it is an execution lever.

 

 

To find out more, listen to the Societe Generale Factoring podcast dedicated to factoring as a development lever for mid-sized companies.