The facility commonly known as Confirming in Spain and Reverse Factoring in the rest of the countries, is the facility where the issuer communicates to its suppliers, through the technological means of its financial entities (Banks and Non-Banks) about the conformity of invoices owed to them and offers them a liquidity facility against the credit risk capacity of the issuer.
Non-bank financing entities have specialized in offering this product, maintaining the basic features such as non-recourse to the supplier and adding additional advantages.
- Specialization. Offering means such as highly specialized technological platforms that provide the issuer and the supplier with higher quality in the issuance, advance and payment processes (speed, traceability, timely reports, notices, detailed information).
- No impact on CIRBE, which does not reduce the capacity for additional indebtedness in other types of financing necessary for the company issuing the confirming (guarantees, short and long term credit).
- The supplier uses the creditworthiness of its debtor, so it does not use its own creditworthiness in its banks either.
- Low administrative costs, and simplification of processes with online and 24/7 media.
- Diversification in the type of relationship financial institution
In recent years, this facility has been increasingly used to finance companies' working capital needs. According to the Spanish Factoring and Confirming Association (AEF), confirming activity in Spain increased by 4.56% in 2020, while factoring products declined in use in the year when the pandemic began.
Given these data, the incorporation of a specialized non-bank entity such as Finalbion for the financing of working capital is an option that has already been taken by more than 100 business groups in Spain, having financed more than 1,000 million Euros to more than 6,100 suppliers in Confirming lines.
