Debt Financing Global Market Report 2024

The debt financing market size has grown strongly in recent years. It will grow from $19.68 billion in 2023 to $21.12 billion in 2024 at a compound annual growth rate (CAGR) of 7.3%. The observed growth during the historic period in debt financing can be attributed to various factors. These include overall economic growth, globalization fostering business expansion, increased entrepreneurial activities, real estate development requiring substantial capital, and government stimulus programs that may have encouraged borrowing for various purposes. These factors collectively contributed to the utilization of debt financing as a means to access capital for business and economic activities.

The debt financing market size is expected to see strong growth in the next few years. It will grow to $27.71 billion in 2028 at a compound annual growth rate (CAGR) of 7.0%. The anticipated growth in the forecast period for debt financing can be attributed to several factors. These include initiatives related to climate change, growth in the healthcare sector, increased focus on renewable energy projects, government spending on infrastructure, and the expansion of global trade. Major trends expected in the forecast period include the rise of sustainable and green financing practices, the influence of low-interest rates and monetary policies on borrowing, the emergence of technology-driven lending platforms, the adoption of covenant-lite loan structures, and increased funding for innovation and research.

The expansion in the number of small businesses is anticipated to drive the growth of the debt financing market in the foreseeable future. Small businesses, defined by their limited employee count and revenue compared to larger enterprises, benefit from debt financing as it offers access to essential capital without relinquishing ownership. This financial mechanism empowers them to fuel their growth, innovate products, and scale their operations while retaining control over their business affairs. For example, as of August 2022, the Small Business Administration (SBA) Office of Advocacy reported a 1.98% increase in small businesses, rising from 32,540,953 in 2021 to 33,185,550 in 2022. These small enterprises collectively employ 61.7 million Americans, constituting 46.4% of private sector employees, underlining their significant contribution to the economy. Therefore, the burgeoning number of small businesses is poised to fuel the debt financing market's growth.

The escalation in healthcare expenses is projected to drive the expansion of the debt financing market in the coming years. Healthcare costs encompass the expenditures incurred on medical services, equipment, pharmaceuticals, and supplies. The surge in healthcare expenses has resulted in a mounting burden of medical debt, leading individuals to seek debt financing to mitigate the financial impact of rising healthcare costs. As evidenced by the Centers for Medicare and Medicaid Services in September 2023, national health expenditures surged by 2.7% to $4.3 trillion in 2021, equating to $12,914 per person and accounting for 18.3% of the gross domestic product (GDP). Within this sphere, Medicare spending witnessed an 8.4% increase to $900.8 billion, comprising 21% of total national health expenditure, while Medicaid spending surged by 9.2% to $734.0 billion, contributing to 17% of total national health expenditure. Thus, the upward trend in healthcare costs is fostering the growth of the debt financing market.

Legal constraints are anticipated to impose limitations on the expansion of the debt financing market in the foreseeable future. These constraints, encompassing diverse regulations governing government borrowing, debt collection practices, and antitrust laws, are instituted by governments and regulatory bodies to uphold financial market stability and safeguard investor interests. Such regulations often create barriers and complexities for both businesses and individuals seeking debt financing. For example, federal laws such as the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) dictate the permissible actions of debt collectors and the reporting of debts within credit reports. Simultaneously, state-level regulations provide additional protections against unfair practices. Consequently, these legal restrictions serve as constraints impeding the growth potential of the debt financing market.

Prominent companies operating in the debt financing domain are prioritizing the development of innovative technologies, such as eLoans solutions, to deliver dependable services to their clientele. eLoans, an electronic platform, offers eligible clients access to liquidity essential for managing commercial ventures, enabling them to oversee outstanding loans through repayment options. As an illustration, in July 2023, Citigroup Inc., a prominent US-based investment banking company, introduced its Trade and Working Capital eLoans solution for U.S. Citi Commercial Bank (CCB) clients. This offering, facilitated by treasury and trade solutions (TTS) on the CitiDirect platform, provides a scalable solution catering to cross-border trade flows. It empowers clients to secure liquidity, manage outstanding loans, and enhance self-service reporting by leveraging automated notifications. By minimizing manual touchpoints, improving self-service reporting capabilities, and supporting the working capital requirements of CCB clients, this digital platform aims to offer greater control and transparency over loan financing without incurring additional charges.

In August 2023, BlackRock Inc., a renowned provider of investment management services based in the United States, completed the acquisition of Kreos Capital Group, a leading growth and venture debt financing solution provider headquartered in the UK. The specific financial terms of the acquisition were not publicly disclosed. This strategic move by BlackRock is aimed at fortifying its global presence and capabilities as a prominent credit asset manager. Through this acquisition, BlackRock endeavors to expand its offerings, providing clients with a wider range of private market debt options and diversified investment solutions.

Major companies operating in the debt financing market report are JPMorgan Chase & Co, Citigroup Inc., Bank of America Corporation, Wells Fargo & Company, Morgan Stanley, HSBC Holdings plc, BNP Paribas SA, Royal Bank of Canada, The Goldman Sachs Group Inc., ING Groep N.V., Mitsubishi UFJ Financial Group Inc., UBS Group AG, Deutsche Bank AG, The Bank of Nova Scotia, Barclays PLC, Societe Generale SA, Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc., BlackRock Inc., Credit Suisse AG, The Bank of New York Mellon Corporation, Nomura Holdings Inc., Blackstone Inc., ABN AMRO Bank N.V., DNB Bank ASA, Jefferies Financial Group Inc., Rothschild & Co SCA, Evercore Inc., Lazard Ltd., Houlihan Lokey Inc.

North America was the largest region in the debt financing market in 2023. The regions covered in the debt financing market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa The countries covered in the debt financing market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The debt financing market includes revenues earned by entities by providing services such as non-bank cash flow lending, secured or unsecured loan, bond issuance, and traditional bank loans. 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 main categories of sources in debt financing are private and public. Private debt financing involves obtaining funds from non-public sources. Various types of debt instruments can be utilized, including bank loans, bonds, debentures, bearer bonds, and others. The durations of these debt instruments can vary, encompassing both short-term and long-term financing options.

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

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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