REPORT HIGHLIGHT
Factoring Services Market size was valued at USD 3,086.1 Million in 2022, expanding at a CAGR of 8.1% from 2023 to 2030.
Factoring services are a type of financial transaction in which a corporation sells its receivables to a third-party company called a factor. Instead of waiting for consumers to pay their invoices, the purpose of factoring is to provide the firm with immediate cash that may be utilized to support cash flow and operating needs. Factoring is a frequent option for firms that are experiencing cash flow issues as a result of prolonged invoice payment terms. It is particularly useful in businesses such as manufacturing, transportation, and service, where there is often a lag between service delivery (and invoicing) and payment. Factoring services are offered by banks and specialized factoring firms. As fintech has grown, certain online platforms now also provide factoring services, which frequently expedite the transaction procedure.
Factoring Services Market- Market Dynamics:
- Rise in open account trading opportunities anticipated to propel market demand.
- The increase in open account trading may result in a surge in the demand for factoring services as companies look for ways to handle the cash flow constraints and credit risk brought on by open account trading. Businesses may have cash flow issues with open account trading because of the time gap between providing a service or a good and getting paid. By settling for these unpaid invoices in advance, factoring services can assist reduce this pressure. According to World integrated trade solution, World had a total export of 19,237,810,179 in thousands of USD and total imports of 17,221,103,581.64 in thousands of USD leading to a positive trade balance of 2,016,706,597.36 in thousands of USD The Effectively Applied Tariff Weighted Average (customs duty) for World is 3.91% and the Most Favored Nation (MFN) Weighted Average tariff is 6.77%. There is an opportunity for expansion in the underdeveloped factoring markets present in many nations. Factoring businesses may find new prospects by entering these areas. However, a lack of awareness can restrict the growth of the factoring services market.
Factoring Services Market- Key Insights:
- As per the analysis shared by our research analyst, the global Factoring Services market is estimated to grow annually at a CAGR of around 8.1% over the forecast period (2023-2030)
- The Factoring Services industry is projected to grow at a significant rate due to the growing awareness of sustainable growth.
- Based on Product type segmentation, white Recourse was predicted to show maximum market share in the year 2022
- Based on Category segmentation, Domestic Factoring was the leading type in 2022
- Based on Financial institution segmentation, Banks were the leading type in 2022
- Based on End-User segmentation, Manufacturing was the leading type in 2022
- On the basis of region, Europe was the leading revenue generator in 2022
Factoring Services Market- Segmentation Analysis:
- The Global Factoring Services Market is segmented on the basis of Product Type, Category, Financial institution, End-user, and Region.
- The market is divided into two categories based on product type: Recourse and Non-Recourse. The recourse segment dominates the market growth. In recourse factoring, the company selling its receivables commits to buying them back if consumers do not pay. This effectively indicates that the risk of nonpayment is assumed by the seller of receivables rather than the factor. This is frequently less expensive because the factor does not bear the risk of non-payment.
- The market is divided into two categories based on Category: Domestic Factoring and International Factoring. The domestic Factoring segment dominates the market. Domestic factoring involves three parties, the seller, the debtor, and the factor. The seller sells its receivables or invoices to the factor in exchange for immediate cash that can be utilized to support cash flow and operational needs. The payment is subsequently gathered directly from the debtor by a factor at a later date.
- The market is divided into two categories based on Financial Institutions: Banks and Non-Banking Financial Institutions. The bank's segment dominates the market. Banks are significant operators in the factoring services market because they frequently function as the factors in these transactions. Banks can offer quick capital to firms by purchasing accounts receivable, which helps to stabilize cash flow and keep businesses functioning.
- The market is divided into four categories based on End-user: Manufacturing, Transport & Logistics, Information Technology, Healthcare, Construction, and Others. The Manufacturing sector dominates the market and is likely to maintain its dominance during the forecast period. One of the most common industries that use factoring services is manufacturing. Manufacturers frequently face a time lag between when they must pay for raw materials and labor and when they get reimbursed by their consumers.
Factoring Services Market- Geographical Insights:
Geographically, this market is widespread in the regions of North America, Latin America, Europe, Asia Pacific, and the Middle East and Africa. These regions are further divided as per the nations bringing business. Europe is expected to dominate the growth of the market, owing to the growing focus of transport companies on export business factoring and emerging start-ups in factoring services. European transportation companies are increasingly focusing on export business, which sometimes includes longer payment terms and might cause cash flow issues. Factoring services might assist these businesses in dealing with these issues by delivering quick cash flow. In Europe, too, the vast majority of land freight is road-based. In 2021, 13.65 billion tons of goods were transported in the 27 EU states, according to Freight Transport Statistics. North America and Asia Pacific region are expected to provide growth opportunities for the market, due to The increasing need for alternative sources of financing for micro and small & medium enterprises driving the growth of the market.
Factoring Services Market- Competitive Landscape:
As traditional lending becomes more stringent and firms explore alternate sources of finance, the demand for factoring services usually rises during economic turmoil. Small and medium-sized businesses (SMEs) are frequently in high demand for factoring services because they may lack the essential cash reserves to deal with delayed payments. Manufacturing companies frequently must pay for raw supplies and labor upfront, yet their clients may take some time to pay them. As a result, factoring services might be extremely beneficial to them. Exporting enterprises may also have a significant demand for factoring services, especially if they have clients in countries where payment can take a long time. For example, on 30 January 2023, Barclays nowadays announces the expansion strategy for its flexible banking formats, as it evolves its physical footprint in response to changing customer needs. 'Barclays Local' provides in-person banking support in community locations and new banking pods across the UK.
Recent Developments:
On 14th February 2022, Novuna Business Finance launches currently as the fifth largest asset finance provider in the UK with an asset portfolio of over £1.5bn. The rebrand under the new trading style of NOVUNA takes place at the same time the company moves from Hitachi Capital (UK) PLC to Mitsubishi HC Capital UK PLC, following the merger last year of its parent company, making it part of Mitsubishi HC Capital Inc., one of the world's largest and most diversified groups
Key features of the study:
- This proposed research study on Factoring Services market provides market size (US$ million), compound annual growth rate (CAGR %) and forecast estimation (2023-2030), considering 2022 as the base year
- The report provides the client the latest up-to-date and trending insights about the Factoring Services market.
- The research report elucidates potential growth opportunities across different segments/countries and explains attractive investment proposition matrix for Factoring Services market
- The overall report identifies new investment opportunities, challenges faced by established players, and growth factors to sustain in the Factoring Services market
- Impact of COVID-19 on Factoring Services market size, forecast, CAGR, and market dynamics are discussed in detail under the research scope. Detailed insight on Factoring Services market post-COVID will also be covered.
- In order to give the users of this report a comprehensive view on the Factoring Services market, we have also included competitive landscape and key innovator analysis for the Factoring Services market.
- The study encompasses a growth prospect mapping analysis, wherein all the industry segments are benchmarked based on their market size, growth rate and attractiveness.
- The report offers detailed company profiling featuring major market participants which will help users to understand their financial information and strategic initiatives of players operating in the Factoring Services market.
- In addition, the report also unveil the important acquisitions & mergers, collaborations & joint ventures, new launch, research & development, regional expansion of major participants involved in the market on global as well as regional level.
- The global Factoring Services market report primarily caters to various stakeholders in this industry including suppliers, investors, new entrants, distributors, and financial analysts
SCOPE OF THE REPORT
The scope of this report covers the market by its major segments, which include as follows:
GLOBAL FACTORING SERVICES MARKET KEY PLAYERS
- altLINE (The Southern Bank Company)
- Barclays Bank PLC
- BNP Paribas
- China Construction Bank Corporation
- Deutsche Factoring Bank
- Eurobank
- Factor Funding Co.
- Hitachi Capital (UK) PLC
- HSBC Group
- ICBC China
- Kuke Finance
- Mizuho Financial Group, Inc.
- RTS Financial Service, Inc.
- Societe Generale S.A.
- TCI Business Capital
GLOBAL FACTORING SERVICES MARKET, BY PRODUCT TYPE
GLOBAL FACTORING SERVICES MARKET, BY CATEGORY
- Domestic Factoring
- International Factoring
GLOBAL FACTORING SERVICES MARKET, BY FINANCIAL INSTITUTION
- Banks
- Non-Banking Financial Institutions
GLOBAL FACTORING SERVICES MARKET, BY END-USER
- Manufacturing
- Transport & Logistics
- Information Technology
- Healthcare
- Construction
- Others
GLOBAL FACTORING SERVICES MARKET, BY REGION
- North America
- The U.S.
- Canada
- Europe
- Germany
- France
- Italy
- Spain
- United Kingdom
- Russia
- Netherlands
- Sweden
- Poland
- Rest of Europe
- Asia Pacific
- India
- China
- South Korea
- Japan
- Australia
- Thailand
- Indonesia
- Philippines
- Rest of APAC
- Latin America
- Brazil
- Mexico
- Argentina
- Colombia
- Rest of LATAM
- The Middle East and Africa
- Saudi Arabia
- United Arab Emirates
- Israel
- Turkey
- Algeria
- Egypt
- Rest of MEA