Factoring Services Market (By Category: Domestic Factoring and International Factoring; By Type: Recourse Factoring and Non-recourse Factoring; By Application: Small & Medium Enterprise (SMEs) and Large Enterprise) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2023 – 2032
The global factoring services market was estimated at US$ 3.30 billion in 2022 and is expected to hit US$ 7.29 billion by 2032, poised to grow at a CAGR of 8.30% from 2023 to 2032.
To Access our Exclusive Data Intelligence Tool with 15000+ Database, Visit: Precedence Statistics
The Europe factoring services market was valued at US$ 1.75 billion in 2022 and is projected to grow US$ 3.94 billion by 2030, poised to grow at a CAGR of 8.50% from 2023 to 2032.
Based on the region, the Europe segment dominated the global factoring services market in 2022, in terms of revenue and is estimated to sustain its dominance during the forecast period. More than two-thirds of the regional market is accounted by the UK, Italy, Germany, Spain, and France. The strategic relevance of receivables funded by commercial banking might be ascribed by the growth. The factoring services are high in demand in the Europe region due to current trade policies inside the European Economic Zone and the rising trade with fast-growing markets in Eastern Bloc nations.
On the other hand, the Asia-Pacificis estimated to be the most opportunistic segment during the forecast period. Due to rapid rise of economies in the Asia-Pacific region, as well as infrastructural and industrial growth, the region is expected to emerge as the fastest-growing regional market. China and India are the two populous countries of Asia-Pacific region, that have a larger need for factoring services among small and medium enterprises (SMEs) in the region.
The factoring is a financial service in which a company sells its bill receivables at a discount rate to a third party in order to raise funds. It’s not the same as invoice discounting. The invoice discounting is the process of having an invoice discounted at a given rate in order to obtain funds, although factoring is a larger notion. Factoring is the process of selling all account receivables to a third party.
Factoring guarantees a predictable cash flow pattern. The credit department is virtually eliminated with continuous factoring. Because of the distinct advantage of flexibility that factoring provides to the borrowing firm, receivable financing is gaining popularity as a beneficial form of financing short-term finance requirements of business organizations. The seller’s bills receivables may continue to be funded in a semi-automated manner. If the company’s revenues grow or shrink, the financing can be adjusted accordingly.
The increase in open account trade and the quick expansion of businesses in Asia, led by China, the increase in cross-border factoring, and the rapid growth and development of factoring services in the developing regions are some of the factors contributing to the growth of the factoring services market during the forecast period.
The growth of the factoring services market can be attributed to rising public knowledge of financial technology advancements, such as government and factoring organization advocacy and initiatives, cryptocurrency, increased use of digital platforms, and an increase in cross-border transactions.
Furthermore, the use of crypto-solutions has increased the accuracy of transactions and secured both parties’ important and confidential information preventing financial fraud. However, the factoring services market growth is being hampered by an increase in data breaches and data privacy violations. In addition, the increased implementation of machine learning, natural language processing (NLP), and artificial intelligence (AI) is expected to generate profitable growth prospects for the factoring services market in the near future.
Report Coverage | Details |
Market Size In 2023 | USD 3.56 Billion |
Revenue Projection by 2032 | USD 7.29 Billion |
Growth Rate | CAGR of 8.30% From 2023 to 2032 |
Largest Market | Europe |
Base Year | 2022 |
Forecast Period | 2023 to 2032 |
Companies Mentioned | The Southern Banc Co. Inc, Advanon AG, BNP Paribas Cardiff, Mizuho Financial Group Inc., Deutsche Leasing AG, Riviera Finance of Texas Inc., SocieteGenerale SA, Eurobank Ergasias SA, Hitachi Capital PLC, Triumph Business Capital |
Based on thecategory, the domestic factoring segment accounted highest share of 70% in 2022. The domestic factoring is carried out within a country. Domestic factoring refers to the acquisition, funding, management, and collection of short-term accounts receivable deriving from the supply goods and services to domestic customers. The goods are distributed on a 180-day open account credit basis.
On the other hand, the international factoring is the fastest growing segment during the forecast period. For businesses involved in the import and export of goods and services, international factoring is a must-have service. Importers frequently demand account trade and longer payment terms from companies engaged in international trade, regardless of their size or industry. This entails receiving money several weeks after the invoice date.
Based on the type, recourse factoring led the market with highest share in 2022. Recourse factoringis agreement between a customer and a factor in which the client agrees to buy back the factor’s unpaid accounts receivable. As a result, in the event of non-payment by the debtor, the credit risk remains with the client.
On the other hand, non-recourse factoring is expected to grow at a faster rate during the forecast period. The customer and the factor enter into a non-recourse factoring agreement in which the factor assumes responsibility for absorbing any unpaid bills receivables. As a result, the unpaid invoices have no impact on the firm.
Based on the application, the small and medium enterprises (SMEs) is likely to dominate the factoring services market in 2022. As small and medium enterprises (SMEs) are the primary adopters of this financing facility, and the interest rates for both recourse and non-recourse factoring are almost same around the world, the global factoring services is anticipated to be dominated by small and medium enterprises (SMEs).
On the other hand, the large enterprises segment is expected to grow at a fast rate during the forecast period. The large enterprises’ increased need for non-recourse borrowing is likely to promote short-term financing in emerging nations, ensuring debt security, employment, and growth possibilities.
Key Companies & Market Share Insights
The market is moderately fragmented with the presence of several local companies. These market players are striving to gain higher market share by adopting different marketing strategies, such as new product launch, investments, partnerships, and mergers & acquisitions. The companies are also spending on the development of improved products. Moreover, they are also focusing on competitive pricing.
In December 2019, the China Construction Bank (CCB) launched the platform for factoring services and trading.
The various developmental strategies such as business expansion, investments, new product launches, acquisition, partnerships,joint venture, and mergers fosters market growth and offers lucrative growth opportunities to the market players.
Segments Covered in the Report
By Category
By Type
By Application
By Geography
Chapter 1. Introduction
1.1. Research Objective
1.2. Scope of the Study
1.3. Definition
Chapter 2. Research Methodology
2.1. Research Approach
2.2. Data Sources
2.3. Assumptions & Limitations
Chapter 3. Executive Summary
3.1. Market Snapshot
Chapter 4. Market Variables and Scope
4.1. Introduction
4.2. Market Classification and Scope
4.3. Industry Value Chain Analysis
4.3.1. Raw Material Procurement Analysis
4.3.2. Sales and Distribution Channel Analysis
4.3.3. Downstream Buyer Analysis
Chapter 5. COVID 19 Impact on Factoring Services Market
5.1. COVID-19 Landscape: Factoring Services Industry Impact
5.2. COVID 19 - Impact Assessment for the Industry
5.3. COVID 19 Impact: Global Major Government Policy
5.4. Market Trends and Opportunities in the COVID-19 Landscape
Chapter 6. Market Dynamics Analysis and Trends
6.1. Market Dynamics
6.1.1. Market Drivers
6.1.2. Market Restraints
6.1.3. Market Opportunities
6.2. Porter’s Five Forces Analysis
6.2.1. Bargaining power of suppliers
6.2.2. Bargaining power of buyers
6.2.3. Threat of substitute
6.2.4. Threat of new entrants
6.2.5. Degree of competition
Chapter 7. Competitive Landscape
7.1.1. Company Market Share/Positioning Analysis
7.1.2. Key Strategies Adopted by Players
7.1.3. Vendor Landscape
7.1.3.1. List of Suppliers
7.1.3.2. List of Buyers
Chapter 8. Global Factoring Services Market, By Category
8.1. Factoring Services Market, by Category Type, 2023-2032
8.1.1. Domestic Factoring
8.1.1.1. Market Revenue and Forecast (2020-2032)
8.1.2. International Factoring
8.1.2.1. Market Revenue and Forecast (2020-2032)
Chapter 9. Global Factoring Services Market, By Application
9.1. Factoring Services Market, by Application, 2023-2032
9.1.1. Small and Medium Enterprise (SMEs)
9.1.1.1. Market Revenue and Forecast (2020-2032)
9.1.2. Large Enterprise
9.1.2.1. Market Revenue and Forecast (2020-2032)
Chapter 10. Global Factoring Services Market, By Type
10.1. Factoring Services Market, by Type, 2023-2032
10.1.1. Recourse Factoring
10.1.1.1. Market Revenue and Forecast (2020-2032)
10.1.2. Non-recourse Factoring
10.1.2.1. Market Revenue and Forecast (2020-2032)
Chapter 11. Global Factoring Services Market, Regional Estimates and Trend Forecast
11.1. North America
11.1.1. Market Revenue and Forecast, by Category (2020-2032)
11.1.2. Market Revenue and Forecast, by Application (2020-2032)
11.1.3. Market Revenue and Forecast, by Type (2020-2032)
11.1.4. U.S.
11.1.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.1.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.1.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.1.5. Rest of North America
11.1.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.1.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.1.5.3. Market Revenue and Forecast, by Type (2020-2032)
11.2. Europe
11.2.1. Market Revenue and Forecast, by Category (2020-2032)
11.2.2. Market Revenue and Forecast, by Application (2020-2032)
11.2.3. Market Revenue and Forecast, by Type (2020-2032)
11.2.4. UK
11.2.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.2.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.2.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.2.5. Germany
11.2.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.2.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.2.5.3. Market Revenue and Forecast, by Type (2020-2032)
11.2.6. France
11.2.6.1. Market Revenue and Forecast, by Category (2020-2032)
11.2.6.2. Market Revenue and Forecast, by Application (2020-2032)
11.2.6.3. Market Revenue and Forecast, by Type (2020-2032)
11.2.7. Rest of Europe
11.2.7.1. Market Revenue and Forecast, by Category (2020-2032)
11.2.7.2. Market Revenue and Forecast, by Application (2020-2032)
11.2.7.3. Market Revenue and Forecast, by Type (2020-2032)
11.3. APAC
11.3.1. Market Revenue and Forecast, by Category (2020-2032)
11.3.2. Market Revenue and Forecast, by Application (2020-2032)
11.3.3. Market Revenue and Forecast, by Type (2020-2032)
11.3.4. India
11.3.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.3.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.3.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.3.5. China
11.3.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.3.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.3.5.3. Market Revenue and Forecast, by Type (2020-2032)
11.3.6. Japan
11.3.6.1. Market Revenue and Forecast, by Category (2020-2032)
11.3.6.2. Market Revenue and Forecast, by Application (2020-2032)
11.3.6.3. Market Revenue and Forecast, by Type (2020-2032)
11.3.7. Rest of APAC
11.3.7.1. Market Revenue and Forecast, by Category (2020-2032)
11.3.7.2. Market Revenue and Forecast, by Application (2020-2032)
11.3.7.3. Market Revenue and Forecast, by Type (2020-2032)
11.4. MEA
11.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.4.4. GCC
11.4.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.4.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.4.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.4.5. North Africa
11.4.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.4.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.4.5.3. Market Revenue and Forecast, by Type (2020-2032)
11.4.6. South Africa
11.4.6.1. Market Revenue and Forecast, by Category (2020-2032)
11.4.6.2. Market Revenue and Forecast, by Application (2020-2032)
11.4.6.3. Market Revenue and Forecast, by Type (2020-2032)
11.4.7. Rest of MEA
11.4.7.1. Market Revenue and Forecast, by Category (2020-2032)
11.4.7.2. Market Revenue and Forecast, by Application (2020-2032)
11.4.7.3. Market Revenue and Forecast, by Type (2020-2032)
11.5. Latin America
11.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.5.3. Market Revenue and Forecast, by Type (2020-2032)
11.5.4. Brazil
11.5.4.1. Market Revenue and Forecast, by Category (2020-2032)
11.5.4.2. Market Revenue and Forecast, by Application (2020-2032)
11.5.4.3. Market Revenue and Forecast, by Type (2020-2032)
11.5.5. Rest of LATAM
11.5.5.1. Market Revenue and Forecast, by Category (2020-2032)
11.5.5.2. Market Revenue and Forecast, by Application (2020-2032)
11.5.5.3. Market Revenue and Forecast, by Type (2020-2032)
Chapter 12. Company Profiles
12.1. The Southern Banc Co. Inc
12.1.1. Company Overview
12.1.2. Product Offerings
12.1.3. Financial Performance
12.1.4. Recent Initiatives
12.2. Advanon AG
12.2.1. Company Overview
12.2.2. Product Offerings
12.2.3. Financial Performance
12.2.4. Recent Initiatives
12.3. BNP Paribas Cardiff
12.3.1. Company Overview
12.3.2. Product Offerings
12.3.3. Financial Performance
12.3.4. Recent Initiatives
12.4. Mizuho Financial Group Inc.
12.4.1. Company Overview
12.4.2. Product Offerings
12.4.3. Financial Performance
12.4.4. Recent Initiatives
12.5. Deutsche Leasing AG
12.5.1. Company Overview
12.5.2. Product Offerings
12.5.3. Financial Performance
12.5.4. Recent Initiatives
12.6. Riviera Finance of Texas Inc.
12.6.1. Company Overview
12.6.2. Product Offerings
12.6.3. Financial Performance
12.6.4. Recent Initiatives
12.7. SocieteGenerale SA
12.7.1. Company Overview
12.7.2. Product Offerings
12.7.3. Financial Performance
12.7.4. Recent Initiatives
12.8. Eurobank Ergasias SA
12.8.1. Company Overview
12.8.2. Product Offerings
12.8.3. Financial Performance
12.8.4. Recent Initiatives
12.9. Hitachi Capital PLC
12.9.1. Company Overview
12.9.2. Product Offerings
12.9.3. Financial Performance
12.9.4. Recent Initiatives
12.10. Triumph Business Capital
12.10.1. Company Overview
12.10.2. Product Offerings
12.10.3. Financial Performance
12.10.4. Recent Initiatives
Chapter 13. Research Methodology
13.1. Primary Research
13.2. Secondary Research
13.3. Assumptions
Chapter 14. Appendix
14.1. About Us
14.2. Glossary of Terms
No cookie-cutter, only authentic analysis – take the 1st step to become a Precedence Research client