Factoring Market Size (2024 - 2029)

Factoring Market Analysis

The Factoring Market size is estimated at USD 4.16 trillion in 2024, and is expected to reach USD 5.59 trillion by 2029, growing at a CAGR of 6.05% during the forecast period (2024-2029).

The market's expansion can be primarily ascribed to the increase of open account trading and international commerce. The industry is expanding because of the need for alternate financing sources for SMEs and startups. It is anticipated that technological advancements such as distributed ledgers and blockchain would enhance the supply chain process by lowering operating costs and bolstering system security.

There are various influences propelling the market forward, including a rising need for alternative financial solutions, expanding global trade, notable technological progress, increasing economic unpredictability, the ongoing practice of outsourcing non-essential functions, and heightened competition among factoring companies.

Technology is revolutionizing the factoring sector. Therefore, factoring is now simpler and more effective because of the usage of cutting-edge technology like blockchain, artificial intelligence, and data analytics. Artificial intelligence (AI) is being utilized more and more to evaluate credit risk in real-time. This helps to expedite the approval process by producing evaluations that are quicker and more accurate.

Factoring assists companies in obtaining working capital loans and reducing credit risk. It also offers factoring, a benefit of supply chain financing. The expansion of the banking, finance, and insurance industries is one of the factors propelling the market's growth. The market is expanding due to the rising need for MSME financing, another source of funding.

In affluent nations, importers are also thinking about factoring as a substitute for conventional trade financing. Increased knowledge of international trade and the transfer of industrial operations from China to developing nations like Vietnam, Mexico, and the Philippines following COVID-19 have both contributed to the growth of the international segment.

Factoring Industry Segmentation

Factoring can be referred to by various terms, including invoice financing, asset-based lending, or accounts receivable financing. Factoring is a prevalent method employed by businesses to manage cash flow, involving the sale of their invoices to third parties at a discounted rate. The factoring market is segmented by provider, enterprise size, application, and end users. By provider, the market is segmented into banks and NBFCs. By enterprise size, the market is segmented into large enterprises and SMEs. By application, the market is segmented into domestic and international. By end user, the market is segmented into construction, manufacturing, healthcare, transportation and logistics, energy and utilities, IT and telecom, and other end-users (staffing agencies, advertising, etc.), and by region, the market is segmented into North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa. The report offers market size and forecasts of the factoring market in value for all the above segments (USD).