20 October 2020

European companies’ demand for working capital finance saw an unprecedented spike in the first half of 2020

2:00 Min

The coronavirus pandemic and subsequent economic downturn has triggered a contraction of revenues across industries and geographies. Consequently, European corporates’ demand for working capital finance saw an unprecedented spike in the first two quarters of 2020.

The following chart shows the results of the European Central Bank (ECB)’s regular Bank Lending Survey, which illustrates how demand for inventories and working capital is rising significantly -going beyond anything seen over the last two decades or so.

In all the largest Eurozone countries, demand for short-term corporate loans has also increased considerably.

With the uncertainty of the macro-economic landscape likely to persist in the near future, companies of all kinds will need to reconsider and optimise their working capital management strategies, in order to secure a robust cash flow and mitigate financial risks.

UniCredit remains on hand to support clients of all sizes with an innovative suite of tailored working capital tools that can be combined and customised to enable businesses to absorb the economic shock caused by Covid-19– all possible whilst working remotely, if needed.

From this perspective, our bank offers web-based receivables finance programmes, allowing corporates to secure early payment and reduce risk exposure. Large buyers can also support their suppliers by securing more favourable financing rates for them through UniCredit’s bespoke supply chain finance programmes, which accelerate payments to suppliers, and provide liquidity in advance of invoice due dates.