Factoring Services Global Market Report 2024

Factoring services involve financial transactions where a business sells its accounts receivable (invoices) to a third party, known as a factor, at a discounted rate. This enables the selling business to receive immediate cash flow while transferring the responsibility of collecting the receivables to the factor.

The main types of factoring services include recourse and non-recourse factoring. Recourse factoring means the selling business retains responsibility for the repayment of the factored invoices if the buyer fails to pay. Providers of factoring services include banks and non-banking financial institutions, catering to both domestic and international markets. These services find applications across various sectors, including small and medium enterprises (SMEs), large enterprises, and industries such as manufacturing, transport and logistics, information technology, healthcare, construction, and others.

The factoring services market research report is one of a series of new reports that provides factoring services market statistics, including factoring services industry global market size, regional shares, competitors with a factoring services market share, detailed factoring services market segments, market trends, and opportunities, and any further data you may need to thrive in the factoring services industry. This factoring services research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The factoring services market size has grown strongly in recent years. It will grow from $3.43 billion in 2023 to $3.7 billion in 2024 at a compound annual growth rate (CAGR) of 8.%. The growth during the historic period can be attributed to several factors, including increasing demand for alternative financing solutions, expanding banking and trading activities, the rising popularity of factoring services as a flexible financing option, growing need for working capital financing alternatives among businesses, and increased international trade activities driving the demand for financial liquidity solutions.

The factoring services market size is expected to see strong growth in the next few years. It will grow to $5.09 billion in 2028 at a compound annual growth rate (CAGR) of 8.3%. The growth in the forecast period can be attributed to several factors, including the increase in cross-border factoring transactions, rapid growth and development of factoring services globally, enhanced utilization of digital platforms for financial transactions, rising volume of cross-border trade activities, and the expanding manufacturing sector's need for working capital solutions. Major trends anticipated during this period include advancements in financial technology, the emergence of new online factoring platforms, exploration of cryptocurrency solutions in financial transactions, increasing adoption of artificial intelligence (AI) for financial services, ongoing technological innovations in the factoring industry, and integration of supply chain finance with factoring to streamline financial operations.

The factoring services market is poised for growth driven by an increase in cross-border trade activities. Cross-border trade involves the exchange of goods and services between residents and non-residents of different countries, spurred by advancements in technology, policy shifts, economic strategies, and market demands. Factoring services play a crucial role in cross-border trade by optimizing cash flow, managing risks, and supporting global expansion through the sale of accounts receivable to third-party factoring companies. For instance, the United Nations Conference on Trade and Development reported in February 2022 that global trade reached a record high of $28.5 trillion, marking a 25% increase from 2020. This surge in cross-border trade activities is a key driver behind the growth of the factoring services market.

Leading companies in the factoring services market are innovating with solutions such as receivables finance to gain competitive advantages. Receivables finance enables businesses to access funds based on their outstanding invoices, enhancing cash flow management and supporting business growth by converting receivables into immediate cash. For example, Kyriba Corp. launched Kyriba Receivables Finance in December 2022, an advanced factoring solution designed to streamline invoice factoring processes. The platform simplifies payment management with automated processing and provides real-time visibility through a secure dashboard, facilitating efficient monitoring of invoices and payments. It also offers businesses access to various financing and credit options, ensuring quick access to capital.

In January 2022, FundThrough Inc. acquired BlueVine to strengthen its embedded finance capabilities, expand its footprint in the U.S., increase funding transactions, and improve cash flow management for small businesses. BlueVine specializes in providing invoice factoring services to small enterprises, enhancing FundThrough's ability to serve a broader client base with comprehensive financing solutions.

Major companies operating in the factoring services market are ICBC China Limited, JPMorgan Chase & Co., Banco Santander S.A., HSBC Holdings plc, Wells Fargo & Company, BNP Paribas SA, Banco do Brasil S.A., ING Groep N.V., Barclays Bank plc, Societe Generale SA, Banco Bilbao Vizcaya Argentaria S.A., Deutsche Bank AG, Sumitomo Mitsui Banking Corporation, UniCredit S.p.A., Standard Chartered plc, KBC Group NV, Commerzbank AG, Banco Popular Español S.A., TCI Business Capital Inc., RTS Financial Service Inc., Advanon AG.

Europe was the largest region in the factoring services market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the factoring services market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

The countries covered in the factoring services market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The factoring services market includes revenues earned by entities by providing discount fees, financing charges, consulting services, charge additional fees, and related invoice discounting, maturity factoring, recourse factoring, and spot factoring. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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