NEW
YORK, Aug. 23, 2024 /PRNewswire/ -- The global
factoring market size is estimated to grow by USD 2.19 trillion from 2024-2028, according to
Technavio. The market is estimated to grow at a CAGR of 8.8% during
the forecast period. Growing need for alternative sources of
financing for msmes is driving market growth, with a
trend towards advent of blockchain in factoring services.
However, fluctuations in global economic conditions poses a
challenge. Key market players include ABS Global Factoring AG,
American Receivable, Bluevine Inc., CapitalPlus Construction
Services, CG24 Group AG, Charter Capital Holdings LP, Deutsche
Leasing AG, eCapital Corp., Factor Funding Co., HSBC Holdings Plc,
Mizuho Financial Group Inc., New Century Financial Inc., Pincap.,
PMFBancorp, Riviera Finance of Texas Inc., Societe Generale SA, The
Southern Banc Co. Inc., Triumph Business Capital, Universal Funding
Corp., and Worldline SA.
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segments, customer landscape, and companies- View the snapshot of
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Factoring Market
Scope
|
Report
Coverage
|
Details
|
Base year
|
2023
|
Historic
period
|
2018 - 2022
|
Forecast
period
|
2024-2028
|
Growth momentum &
CAGR
|
Accelerate at a CAGR of
8.8%
|
Market growth
2024-2028
|
USD 2196.4
billion
|
Market
structure
|
Fragmented
|
YoY growth 2022-2023
(%)
|
7.49
|
Regional
analysis
|
Europe, APAC, South
America, North America, and Middle East and Africa
|
Performing market
contribution
|
Europe at
57%
|
Key
countries
|
UK, China, France,
Germany, and US
|
Key companies
profiled
|
ABS Global Factoring
AG, American Receivable, Bluevine Inc., CapitalPlus Construction
Services, CG24 Group AG, Charter Capital Holdings LP, Deutsche
Leasing AG, eCapital Corp., Factor Funding Co., HSBC Holdings Plc,
Mizuho Financial Group Inc., New Century Financial Inc., Pincap.,
PMFBancorp, Riviera Finance of Texas Inc., Societe Generale SA, The
Southern Banc Co. Inc., Triumph Business Capital, Universal Funding
Corp., and Worldline SA
|
Market Driver
The blockchain technology underpinning Bitcoin is
revolutionizing various industries, including factoring. This
technology's potential to transform exchanges, such as the stock
market and patent awarding, is evident with NASDAQ's
implementation. The global blockchain technology market's growth in
the BFSI sector is driven by increasing investments from
governments like the UK, Canada,
Russia, and China. In the future, blockchain will
significantly impact trade finance, with developed nations testing
its affordability. Compliance with anti-money laundering and KYC
regulations will be challenges, but continuous innovation will
reduce setup costs and positively affect the global factoring
market. This technology will digitize the process, offer better
recording technology for trade transactions, and provide easy
access to information about factors, buyers, and sellers, reducing
risks for all stakeholders.
The factoring market is experiencing significant trends in the
international fintech sector, with licensed e-money institutions
and payment service providers offering automated solutions for
businesses. Banks and third-party insurers collaborate to provide
secure factoring services, utilizing data-driven decision-making
and invoice factoring. Companies like FundBox and Unicsoft offer
innovative solutions using blockchain technology, ensuring secure
transaction processes and credit risk mitigation. Businesses can
benefit from growth opportunities in domestic, international,
cross-border, export factoring, and open account terms. Information
technology plays a crucial role, with smart contracts on Ethereum,
NEO, Hyperledger, and R3CORDA streamlining the factoring process.
Loans are provided in a secure manner, supporting businesses'
financial needs and improving liquidity. Exporters and importers
can mitigate bankruptcy risks and increase sales volume with
factoring services. Financial frauds are minimized using
centralized and encrypted approaches. Crypto-solutions are also
emerging as a new trend in the factoring market.
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Market Challenges
- Economic uncertainty poses significant challenges to the global
factoring market. Fluctuations in economic conditions, such as
recessions or currency devaluations, increase the risk of client
defaults. This volatility makes it difficult for factoring
companies to accurately assess creditworthiness and manage risks,
threatening the predictability of cash flows and the reliability of
collateral. Moreover, economic uncertainty complicates revenue and
profitability forecasting, leading to hesitancy among investors and
lenders. Factoring firms must adapt to market conditions, navigate
risks, and maintain liquidity. Robust risk mitigation measures are
essential to address the complexities of decision-making and
external shocks, ensuring the resilience and growth of the global
factoring market.
- The Factoring Market encompasses various industries like
laboratory services, ambulatory services, health centers &
hospitals, home health agencies, rehabilitation centers, and more.
Sellers, mainly small and medium-sized enterprises (SMEs), face
challenges in managing their accounts receivables, especially when
dealing with unpaid bills from buyers in the healthcare sector.
Factors offer flexible financing alternatives by purchasing
invoices at a discounted rate, providing sellers with immediate
funds. However, factors charge discount rates, interest, and
commission fees. Financial service providers, including banks, play
a crucial role in the factoring market. They facilitate the
transfer of funds between the seller and the factor. The
globalization of commerce and economic swings pose challenges,
necessitating regulatory changes and industry trends. Fintech
solutions, such as digital money transfer and payments, have
increased adoption rates, improving budgeting, financial planning,
borrowing, saving, investment, and insurance for small business
owners. Despite these benefits, factors must navigate economic
swings, regulatory changes, and industry trends to maintain
liquidity and operational activity.
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challenges - Request a sample report!
Segment Overview
This factoring market report extensively covers market
segmentation by
- Type
- 1.1 Domestic
- 1.2 International
- Application
- 2.1 SMEs
- 2.2 Large enterprise
- Geography
- 3.1 Europe
- 3.2 APAC
- 3.3 South America
- 3.4 North America
- 3.5 Middle East and
Africa
1.1 Domestic- In the realm of business finance,
domestic factoring refers to a transaction where all parties
involved - the factor, buyer, and seller - are based in the same
country. This arrangement offers several advantages, particularly
for small and medium-sized enterprises (SMEs) that may struggle to
secure traditional bank loans due to insufficient credit histories
or collateral. Domestic factoring provides these businesses with a
viable alternative to maintain cash flow and foster growth.
Additionally, the surge in e-commerce and online businesses has
heightened the need for quick financing solutions. Domestic
factoring caters to this demand by offering short-term working
capital against accounts receivables, enabling sellers to access
cash for domestic sales. This financing method is popular in
regions such as APAC, Africa, and
South America, where the number of
domestic businesses is on the rise. Consequently, the domestic
segment of the global factoring market is anticipated to expand at
a faster rate during the forecast period.
For more information on market segmentation with
geographical analysis including forecast (2024-2028) and historic
data (2017-2021) - Download a Sample Report
Research Analysis
The Factoring Market is experiencing significant growth due to
the increasing adoption of advanced technologies like Machine
Learning (ML) and Artificial Intelligence (AI) in financial
institutions' accounts receivable processes. Traditional methods
like cheques are being replaced by electronic alternatives, leading
to automation and increased efficiency. On-premise deployment is
giving way to cloud-based models and digital documentation,
enabling real-time access to information. AI-based models are
revolutionizing the factoring industry by providing accurate credit
risk assessments and improving customer experience. The market is
expanding beyond traditional industries to include sectors like
international trade, medical insurance claims, laboratory services,
ambulatory services, home health agencies, nurse staffing agencies,
rehabilitation centers, financial services, debt, capital, and
potential investors. Trade finance and supply chain finance are
also benefiting from factoring solutions. Cryptocurrency is a new
frontier in the factoring market, offering faster and more secure
transactions. Overall, the factoring market is evolving to meet the
changing needs of businesses and financial institutions, offering
innovative solutions for debt financing and capital raising.
Market Research Overview
The Factoring Market is a dynamic and evolving sector that
leverages Machine Learning (ML) and Artificial Intelligence (AI) to
streamline financial transactions for businesses and financial
institutions. Accounts receivable processes are being
revolutionized through the use of cheques and electronic
alternatives, with automation and digital documentation becoming
increasingly popular. Cloud-based models and AI-based models are
transforming the industry, enabling real-time processing and
reducing operational activity. Cryptocurrency and international
trade are also driving growth in the market, particularly in the
bank segment. Factoring benefits include improved liquidity, faster
payment processing, and risk management. The market is being shaped
by economic swings, regulatory changes, and industry trends, with
fintech solutions like FundBox and Accounting software offering
flexible financing alternatives for small businesses. Financial
service providers, including banks, are partnering with third-party
insurers and payment service providers to offer automated
solutions. The adoption rate of financial technology is increasing,
enabling data-driven decision making, loans, budgeting, financial
planning, borrowing, saving, and investment. Blockchain technology
is also being explored for secure and transparent invoice factoring
transactions. Despite the growth opportunities, the market faces
challenges such as financial frauds and the need for secure data
handling. The future of factoring lies in innovative solutions that
leverage technology to provide efficient, cost-effective, and
secure financing options for businesses.
Table of Contents:
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation
- Type
-
- Application
-
- Geography
-
- Europe
- APAC
- South America
- North America
- Middle East And Africa
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix
About Technavio
Technavio is a leading global technology research and advisory
company. Their research and analysis focuses on emerging market
trends and provides actionable insights to help businesses identify
market opportunities and develop effective strategies to optimize
their market positions.
With over 500 specialized analysts, Technavio's report library
consists of more than 17,000 reports and counting, covering 800
technologies, spanning across 50 countries. Their client base
consists of enterprises of all sizes, including more than 100
Fortune 500 companies. This growing client base relies on
Technavio's comprehensive coverage, extensive research, and
actionable market insights to identify opportunities in existing
and potential markets and assess their competitive positions within
changing market scenarios.
Contacts
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/
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