Factoring is the process of purchasing accounts receivable or invoices from an organization at a discounted price to meet its short-term liquidity needs and to make profit for buyers. In addition, it refers to debt factoring, invoice financing, asset-based lending, and accounts receivable funding. It is a popular way for companies to fund cash flow by selling invoices to third parties at discounted prices. Moreover, these services are provided by either banks or independent financial services providers. However, it has some of the most common forms of factoring process that includes redemption, non-redemption, disclosure, discourse, domestic, export prepayment, and maturity factoring.
Rise in open account trading opportunities and need for alternate sources of financing for small & medium enterprises (SMEs) to meet immediate business goals are driving the global factoring service market. Moreover, increased awareness and understanding of supply chain financing benefits are boosting the market size. However, lack of a stringent regulatory framework for debt recovery mechanisms and foreign currency restrictions, and stamp duties are hampering the growth of the market. On the contrary, rise in technological advancements such as automated invoices are expected to offer remunerative opportunities for expansion of the market during the forecast period.
The factoring service market is segmented on the basis of by component, enterprise size, application, industrial vertical and region. On the basis of component, the market is categorized into banks and NBFCs. On the basis of enterprise size, the market is bifurcated into large enterprises and SMEs. On the basis of application, the market is classified into domestic and international. On the basis of industrial vertical, it is classified into construction, manufacturing, healthcare, transportation and logistics, energy and utilities, it and telecom, staffing, and others. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players that operate in the factoring service market are Advanon AG, ALAMI Technologies, Aldermore Bank PLC, AwanTunai, Barclays PLC, BNP Paribas, China Construction Bank, Deutsche Factoring Bank, Eurobank, Hitachi Capital (UK) PLC, HSBC Group, ICBC, KUKE Finance JS, Mizuho Financial Group, Inc, Riviera Finance of Texas, Inc, Societe Generale, and The Southern Bank Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Rise in open account trading opportunities and need for alternate sources of financing for small & medium enterprises (SMEs) to meet immediate business goals are driving the global factoring service market. Moreover, increased awareness and understanding of supply chain financing benefits are boosting the market size. However, lack of a stringent regulatory framework for debt recovery mechanisms and foreign currency restrictions, and stamp duties are hampering the growth of the market. On the contrary, rise in technological advancements such as automated invoices are expected to offer remunerative opportunities for expansion of the market during the forecast period.
The factoring service market is segmented on the basis of by component, enterprise size, application, industrial vertical and region. On the basis of component, the market is categorized into banks and NBFCs. On the basis of enterprise size, the market is bifurcated into large enterprises and SMEs. On the basis of application, the market is classified into domestic and international. On the basis of industrial vertical, it is classified into construction, manufacturing, healthcare, transportation and logistics, energy and utilities, it and telecom, staffing, and others. By region, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The key players that operate in the factoring service market are Advanon AG, ALAMI Technologies, Aldermore Bank PLC, AwanTunai, Barclays PLC, BNP Paribas, China Construction Bank, Deutsche Factoring Bank, Eurobank, Hitachi Capital (UK) PLC, HSBC Group, ICBC, KUKE Finance JS, Mizuho Financial Group, Inc, Riviera Finance of Texas, Inc, Societe Generale, and The Southern Bank Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
KEY BENEFITS FOR STAKEHOLDERS
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the factoring services market analysis from 2021 to 2031 to identify the prevailing factoring services market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the factoring services market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global factoring services market trends, key players, market segments, application areas, and market growth strategies.
Key Market Segments
By Industry Vertical
- Construction
- Manufacturing
- Healthcare
- Transportation Logistics
- Energy Utilities
- IT Telecom
- Staffing
- Others
By Provider
- Banks
- NBFCs
By Enterprise Size
- Large Enterprises
- SMEs
By Application
- Domestic
- International
By Region
- North America
- U.S.
- Canada
- Europe
- United Kingdom
- Germany
- France
- Italy
- Spain
- Netherlands
- Rest of Europe
- Asia-Pacific
- China
- India
- Japan
- South Korea
- Australia
- Singapore
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Advanon AG
- ALAMI Technologies
- Aldermore Bank
- AwanTunai
- Barclays
- BNP Paribas
- China Construction Bank
- Deutsche Factoring Bank
- Eurobank
- Hitachi Capital (UK) PLC
- HSBC group
- ICBC
- KUKE Finance JSC
- Mizuho Financial Group, Inc.
- Riviera Finance of Texas, Inc.
- Societe Generale
- The Southern Bank Company
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Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: FACTORING SERVICES MARKET, BY PROVIDER
CHAPTER 5: FACTORING SERVICES MARKET, BY ENTERPRISE SIZE
CHAPTER 6: FACTORING SERVICES MARKET, BY APPLICATION
CHAPTER 7: FACTORING SERVICES MARKET, BY INDUSTRY VERTICAL
CHAPTER 8: FACTORING SERVICES MARKET, BY REGION
CHAPTER 9: COMPANY LANDSCAPE
CHAPTER 10: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to the report, titled, “Factoring Services Market," the factoring services market was valued at $3,271.45 billion in 2021, and is estimated to reach $5,872.00 billion by 2031, growing at a CAGR of 6.1% from 2022 to 2031.Factoring service is an oriented one, with highly efficient system with smart contract facilities, transactional security management, and fast funding. Factoring services often connects technologies such as distributed ledger technology (DTL), automated invoice, and accounting software to completely automate business processes. For instance, factoring services can handle all financial business operations and business entity sells its bill receivables to a third party at a discount to raise funds. Furthermore, the key factoring services market trends include rise in open account trading opportunities and need for alternate sources of financing for small & medium enterprises (SMEs) to meet immediate business goals are driving the global factoring services market. Moreover, increased awareness and understanding of supply chain financing benefits are boosting the factoring service market size. However, lack of a stringent regulatory framework for debt recovery mechanisms and foreign currency restrictions, and stamp duties are hampering the growth of the factoring service market. On the contrary, rise in technological advancements such as automated invoices are expected to offer remunerative opportunities for expansion during the factoring service market forecast.
Depending on enterprise size, the large enterprise segment holds the largest factoring services market share as large enterprise have large number of pending invoices, which need factoring services to convert into liquidity. However, the SMEs segment is expected to witness growth at the highest rate during the forecast period as SMEs have very low liquidity and without instant payments companies may become bankrupt.
Region wise, the factoring services market size was dominated by Europe in 2021 and is expected to retain its position during the forecast period, owing to growth in demand for adoption of factoring services among large enterprises. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to rise in awareness regarding factoring services and increase government regulations supporting growth of factoring services.
The COVID-19 pandemic is expected to positively impact the overall economy of the factoring service industry, owing to surge in need for analyzing large data sets of genuine claims and to reduce risks and costs related to frauds and achieve superior results. For instance, according to survey of in bank of Korea, in June 2020 business confidence indicator improved for the second month in a row, with the sentiment for small and medium sized companies improving more than for larger firms and showed that over 71% of small businesses indicate their firm can emerge better and stronger after COVID-19.
Moreover, investments in factoring service are becoming popular day-by-day, owing to increase in attention toward data to help financial institutes find out the future performance of the firm to take corrective measures at an early stage in case of any probable crisis in future, which, in turn, is contributing toward the growth of the market. For instance, on February 2021, as per the Poland survey the factoring service is most often used by entrepreneurs from the production and distribution sectors. Maintaining financial liquidity determines their survival and development. Factoring allows them to sustain a good economic condition, a stable market position, and competitive advantage in handling various critical issues related to customer insights during COVID-19 pandemic, which is that propel the factoring services market growth.
Key Findings of the Study
- By application, the domestic segment accounted for the largest factoring service market share in 2021.
- By region, Europe generated highest revenue in 2021.
- By industry vertical, the manufacturing segment generated the highest revenue in 2021.
- The key players that operate in the factoring services market analysis are Advanon AG, ALAMI Technologies, Aldermore Bank PLC, AwanTunai, Barclays PLC, BNP Paribas, China Construction Bank, Deutsche Factoring Bank, Eurobank, Hitachi Capital (UK) PLC, HSBC Group, ICBC, KUKE Finance JS, Mizuho Financial Group, Inc, Riviera Finance of Texas, Inc, Societe Generale, and The Southern Bank Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the factoring services industry.
Companies Mentioned
- Advanon AG
- Alami Technologies
- Aldermore Bank
- Awantunai
- Barclays
- Bnp Paribas
- China Construction Bank
- Deutsche Factoring Bank
- Eurobank
- Hitachi Capital (Uk) plc
- Hsbc Group
- Icbc
- Kuke Finance Jsc
- Mizuho Financial Group, Inc.
- Riviera Finance of Texas, Inc.
- Societe Generale
- The Southern Bank Company
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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