According to the latest report by IMARC Group, titled “Factoring Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2022-2027,” the global factoring market size reached US$ 3,467 Billion in 2021. Also known as debtor financing, factoring is an asset-based financial arrangement wherein a business sells its accounts receivables to a third party at a discount. It assists in generating instant liquidity, providing cash flow optimization and credit protection against bad debts, debtor insolvency, and losses. It also aids in facilitating business continuity without disruptions. As it does not create any liability on the balance sheet, it is a highly preferred option for trade financing receivables around the world.
We are regularly tracking the direct effect of COVID-19 on the market, along with the indirect influence of associated industries. These observations will be integrated into the report.
Global Factoring Market Trends:
There is a considerable rise in cross-border factoring on account of the increasing open account trade and emerging markets across the globe. This, in confluence with the growing need for an alternative source of financing small and medium enterprises (SMEs), represents one of the key factors positively influencing the market. Apart from this, as factoring services are easy and flexible and offer same-day funding at substantial rates, they are increasingly being adopted by technology companies worldwide. Furthermore, the integration of cryptocurrency and blockchain technology with factoring is enabling the automation of invoices. This, along with the thriving banking, financial services, and insurance (BFSI) sector, is strengthening the growth of the market. Looking forward, the market value is projected to reach US$ 4,877 Billion by 2027, expanding at a CAGR of 6.1% during the forecast period (2022-2027).
- Based on the type, domestic factoring accounts for the majority of the total market share, followed by international factoring.
- On the basis of the organization size, the market has been bifurcated into small and medium enterprises (SMEs) and large enterprises.
- Based on the application, the market has been divided into transportation, healthcare, construction, manufacturing, and other sectors. Currently, the manufacturing sector dominates the market.
- Region-wise, the market has been classified into North America (the United States and Canada); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Europe (the United Kingdom, Germany, France, Italy, Spain, Russia, and others); Latin America (Brazil, Mexico, and others); and Middle East and Africa. Amongst these, Europe enjoys the leading position in the market.
- The competitive landscape of the market has been examined, with some of the key players being Advanon AG (CreditGate24 (Schweiz) AG), Aldermore Bank PLC (FirstRand Group), Bluevine Capital Inc., BNP Paribas S.A., Deutsche Leasing AG (Deutsche Sparkassen Leasing AG & Co. KG), Eurobank Ergasias SA, HSBC Holdings Plc, Mizuho Financial Group Inc., Société Générale S.A. and The Southern Bank Company Inc.
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