Cyberattacks can paralyze businesses—and, for companies that use factoring, immediately trigger massive liquidity problems. Why companies should consider this risk early on.

Factoring ensures liquidity—but can become a risk in a crisis

Many companies rely on factoring to stabilize their cash flow, bridge payment terms, and put their financing on a solid footing. Especially during economically challenging times, factoring is an important part of many companies’ financing strategies.

But this is precisely where a risk lies that is often underestimated in practice: If a cyberattack occurs, factoring can actually exacerbate the impact on liquidity. “Der Treasurer” also addresses this risk in a recent article.

“If the factor purchases receivables resulting from fraudulent acts, it becomes very problematic, because debt collection and other measures come to nothing,” explains GFL expert Fabian Sarafin. “As a rule, the receivables are then returned to the customer, which directly affects the factoring agreement and the liquidity the customer receives from factoring.”

Director Liability: An Often Underestimated Risk

Another point that companies should by no means underestimate is the potential personal liability of management. “Many factoring agreements stipulate that managing directors are liable in such cases, and this liability could come into play in a worst-case scenario,” warns Fabian Sarafin.

This makes it clear that a cyber incident can not only have a financial impact on the company, but can also have significant consequences for its management.

Cases of fraud and cyber incidents can have an immediate negative impact on factoring

From the perspective of GFL – Gesellschaften für Liquidität, this is therefore an issue that companies should incorporate much more heavily into their financing and risk planning. “In practice, we see time and again that this leads to liquidity bottlenecks for clients and can put companies in long-term financial distress.”

After all, factoring is much more than just a tool for raising short-term liquidity. It is often a key component of a company’s ongoing financing —and that is precisely why the risks arising from IT outages, cyberattacks, or fraud must be taken into account early on.

GFL not only helps companies structure appropriate factoring and financing solutions, but also assists them in realistically assessing the associated risks. Especially during periods of market volatility, it is crucial for companies to manage their liquidity not only efficiently but also in a way that is resilient to crises.

“There are no insurance options on the market for factoring companies, so customers have to make their own arrangements,” said Sarafin.

This is precisely where GFL’s consulting approach comes into play: Financing must not be viewed in isolation, but must always be evaluated from the perspective of resilience, process reliability, and crisis management capabilities.

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