The report, which surveys over 1,500 firms with over 50 employees in the UK, France and Germany, shows that 60% of UK, 58% of German and 71% of French firms are unable to sustain any further stretching of payment terms. Ultimately, 65% of UK, 59% of German and 62% of French firms believe that they will be left with insufficient working capital to take advantage of the economic upswing when it gains momentum.  Suppliers are finding that around half of their larger customers are still trying to extend payment periods.

At the same time, 80% of UK, 78% of German and 83% of French firms are continuing to encounter difficulties in obtaining traditional bank credit.  No immediate recovery appears to be in sight, with improvements not expected until December 2010.  With corporate demand to improve cash flow and release working capital, SCF participation rates have gone from strength to strength. Whilst a quarter of European firms have participated in a SCF solution for some years and 10% have joined in the last 12 months, UK firms are substantially ahead of the trend, with 34% having participated for some years and 11% in the last year.

Furthermore, it appears that these tools are having a lasting effect on European business, as 57% say that supplier financing will remain of greater importance, even when full economic recovery gains momentum. This was especially evident in France (67%) and the UK (56%), demonstrating that alternative financing tools are starting to become ingrained into the financial manager's mindset. SCF is therefore expected to play a much greater part in future strategies.

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