Burlingame, Aug. 06, 2024 (GLOBE NEWSWIRE) -- The global Factoring Services Market, valued at $4,389.48 billion in 2024, is on a trajectory of rapid expansion, with projections indicating it will soar to $7,347.43 billion by 2031, growing at a compound annual growth rate (CAGR) of 7.6% from 2024 to 2031, as per a recent report by Coherent Market Insights. Factoring helps businesses in managing cash flows efficiently by offering immediate access to capital against outstanding invoices. This is useful for companies facing cash crunch or have seasonal variations in cash inflows. Factoring companies leverage their risk management capabilities to thoroughly assess creditworthiness of clients' customers portfolio. This allows businesses to focus on their core operations without worrying about payment collection.
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Market Dynamics:
The Factoring Services Market is primarily driven by the growing demand from SMEs and microfinance companies. Factoring services help SMEs in addressing their cash flow issues and working capital needs by monetizing their invoices and accounts receivable. Moreover, these services enable SMEs to pay their suppliers on time and focus on growing their business operations. Factoring services reduce the risk of non-payment by customers and offer credit protection against bad debts. They allow companies to outsource credit control and debt collection activities, thereby boosting operational efficiency.
Factoring Services Market Report Coverage
| Report Coverage | Details |
| Market Revenue in 2024 | $4,389.48 billion |
| Estimated Value by 2031 | $7,347.43 billion |
| Growth Rate | Poised to grow at a CAGR of 7.6% |
| Historical Data | 2019–2023 |
| Forecast Period | 2024–2031 |
| Forecast Units | Value (USD Million/Billion) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | By Application, By Enterprise Size, By Provider, By Industry Vertical |
| Geographies Covered | North America, Europe, Asia Pacific, and Rest of World |
| Growth Drivers | • Factoring Services Gaining Prominence • Expanded Use of Fintech Platforms |
| Restraints & Challenges | • Higher interest rates for factoring • Stringent regulations for non-recourse factoring |
Market Trends:
Growing Digitization of Factoring Services: Major service providers are focusing on leveraging technologies such as blockchain, artificial intelligence, and cloud computing to make factoring processes automated, transparent, and cost-effective. Digital platforms allow real-time processing of invoices, instant funding approvals, and streamlining of other activities. This is likely to boost the adoption of factoring services.
Rising Cross-Border Trade: Increase in international trade is propelling the demand for cross-border factoring services. These services help companies mitigate risks associated with overseas sales and handle FX exposures. Cross-border factoring offers advanced financing options to companies involved in import and export activities.
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Market Opportunities:
The domestic factoring segment is expected to hold a major market share owing to increasing SMEs in domestic markets. Domestic factoring allows businesses to sell their invoices within the domestic country, enabling them to free up capital and manage cashflows efficiently. It provides financing against invoices of customers within the same country. With growth in local enterprises and restriction in cross-border trade during Covid, demand for domestic factoring services has increased in the past years.
International factoring segment is anticipated to witness fastest growth during the forecast period. Growing trade relations between countries and easier access to global markets has fuelled international business transactions. International factoring helps businesses sell their international invoices and manage payment collection from overseas customers. It assists exporters to mitigate risk of currency fluctuation and export delays. Support from trade promotion organizations and bilateral trade agreements have encouraged more SMEs to adopt international factoring for securing timely payments in foreign currency.
Key Market Takeaways:
The global factoring services market size was valued at USD 4389.48 Bn in 2024 and is expected to reach USD 7,347.43 Bn by 2031, expanding at a CAGR of 7.6% during the forecast period. Growth of digitalization in invoice financing and rising working capital needs of SMEs is anticipated to drive the market.
By category, domestic factoring segment held over 60% market share owing to increasing penetration of factoring among local enterprises. International factoring segment is projected to witness highest CAGR of 9.2% during the forecast years.
By type, non-recourse factoring led the market and non-banks factoring providers are expected to gain prominence due to ease of documentation and faster approval process. Large enterprises accounted for over 70% market share in 2024 however SME segment is estimated to expand at 8.5% CAGR during the predicted years.
Regionally, North America dominated with over 35% market share led by US and Canada. Asia Pacific is anticipated to register fastest growth rate during the forecast timeline on the back of initiatives to strengthen SME sector in emerging countries.
Key players profiled in the factoring services industry include Barclays Bank PLC, BNP Paribas, HSBC Group, Deutsche Factoring Bank, Eurobank, ICBC, Mizuho Financial Group and TCI Business Capital. These players are investing in technologies to offer customized and digital platforms for businesses globally.
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Detailed Segmentation
By Application:
- Domestic
- International
By Enterprise Size:
- Large Enterprises
- SMEs
By Provider:
- Banks
- NBFCs
By Industry Vertical:
- Construction
- Manufacturing
- Healthcare
- Transportation & Logistics
- Energy & Utilities
- IT & Telecom
- Staffing
- Others
By Regional:
North America:
- U.S.
- Canada
Latin America:
- Brazil
- Argentina
- Mexico
- Rest of Latin America
Europe:
- Germany
- U.K.
- Spain
- France
- Italy
- Russia
- Rest of Europe
Asia Pacific:
- China
- India
- Japan
- Australia
- South Korea
- ASEAN
- Rest of Asia Pacific
Middle East:
- GCC Countries
- Israel
- Rest of Middle East
Africa:
- South Africa
- North Africa
- Central Africa
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