For more than 30 years, Cologne-based abcfinance has met the leasing needs of its corporate clients, which are primarily small and medium-sized businesses. It finances a wide range of mobile business assets, from vehicles, machinery and furnishings to telecommunications and IT equipment through to exercise gear and tanning systems. 

 

abcfinance also offers factoring to help clients meet their short-term cash flow needs. Receivables from the sale of goods and services are purchased by abcfinance for up to 90 cents on the euro. Here, too, our nationwide network of offices means we are never far from our clients.

 

Thanks to its full-coverage nationwide network, clients always have a branch office nearby.

Stable and growing with widespread commitments

The abcfinance division comprises the segments Leasing and Factoring. The financing solutions are aimed at small and mid-sized customers and are expanded by the Solutions segment: industry-specific solutions, e.g. for the fitness industry or for innovative paper output systems. In the moveable goods leasing field, abcfinance is one of the leading financing partners among independent leasing companies. With a wide sector distribution and around 30 000 commitments in moveable goods leasing, the financial service provider focuses on small and mid-sized companies in Germany.

 

The economic crisis and the sharp drop in capital investment in 2009 have had a disproportionate effect on the Leasing and Factoring segments. Moveable goods leasing in general recorded significant losses. This applied in particular to independent providers in the market. They were affected by the difficult  refinancing situation as well as the new financial oversight requirements. Similarly, factoring, which had grown considerably in recent years, also suffered due to the drastic drop in customer net sales. Simultaneously, in factoring, foreign suppliers withdrew from the market.

 

In order to make the refinancing of receivables from the leasing business more independent of the volatile credit markets, the division has increased deposits from institutional investors in its in-house bank. At the same time, it has also successfully begun accepting deposits from private customers. This strategic realignment is also reflected in the renaming of WW Bank as abcbank.

 

In factoring – the acquisition of customers' accounts receivable against immediate payment of a purchase price – the abcfinance division is one of the largest suppliers of small and mid-sized companies. In recent years, the Factoring segment has developed a nationwide sales network and its partnership with a leading credit insurer has opened up additional acquisition opportunities. The startup of debcash Forderungsmanagement GmbH has enabled abcfinance to strengthen its activities in debt management.

 

At € 354 million, the net sales of the abcfinance division were around 14 % higher than those of the previous year. In 2009, the Leasing segment was able to improve its new business by 7 % to € 342 million in contrast to the negative industry trend of –23 % (data from the German Association of Leasing Companies). This growth was the result of the new industry solutions in the Solutions segment, from the expanded customer relations as well as the purchase of FGL Finance Leasing GmbH, a leasing company for the leisure industry. The factoring volume for the Factoring segment fell from € 340 million to € 316 million.

 

In order to align its services even more closely to individual customer requirements, the abcfinance division has completely reorganized its Customer Relationship Management (CRM). After a planning and test phase lasting one and a half years, an IT solution was implemented which allows for company-wide sales support. The consolidation of the Leasing, Factoring, and Solutions segments at the end of 2008 required a new CRM system in order to map the more complex information flows and to better utilize cross-selling effects.

 

The financial results of the abcfinance division were lower in 2009 than the previous year but were still satisfactory. Increasing new business had a positive effect while the considerably increased provision for risks created a noticeable burden. Particularly when acquiring new business, continuous checks based on modern credit decision systems are necessary to prevent bad debts. There are early warning systems for this which continuously analyze customer credit ratings based on a variety of information. The risk expenditure relates mainly to the critical transport and component supply industries.

 

2010 will be characterized by the ongoing economic crisis and the weak investment development. Nevertheless, due to the market position it has achieved and a continued conservative risk policy, the abcfinance division foresees opportunities for organic growth and increased results.