U.S. Factoring Services Market Size, Share, & Trends Analysis Report By Category, By Type, By Financial Institution, By End Use, And Segment Forecasts, 2022 - 2030

The U.S. Factoring Services market size was valued at US$ 147.42 billion in 2021 and is expected to hit US$ 287.65 billion by 2030, growing at a compound annual growth rate (CAGR) of 8.4% from 2022 to 2030.

Growth Factors:

The market growth can be attributed to the increased awareness and understanding of supply chain financing benefits, and the rising implementation of digital platforms in trade financing. The COVID-19 outbreak significantly affected the U.S. economy leading to supply chain and market disruptions, and inducing a severe financial impact on enterprises and financial markets. As a result, several trucking companies, such as eCapital, Thunder Funding, RTS Financial, and Apex Capital Corp, are having to adapt to the shifts in the supply chain with the help of technological advancements. This will improve the overall supply chain process by reducing operational costs and enhancing the security across the system.

The growing focus on the improvement of cash flow, reduction in day’s sales outstanding, and reduced accounting cycle time are the major factors driving the growth of the regional market. Manufacturing companies are looking for new opportunities to improve production processes, support employees in simplifying work while maintaining accuracy and create new and innovative products. Manufacturers are embracing new trends, especially in technology, to remain competitive in the market. With the growing propensity of businesses toward digitalization and automating the process, the demand for accounts receivable automation has seen a surge. The adoption of such types of technologies will further boost the factoring market in the U.S. during the forecast period.

The growing demand for precise management of accounting procedures and timely processing of payment processes from customers is contributing to the growth of the market. These capabilities streamline and improve performance by utilizing e-invoicing, scanning, and workflow, online tracking and reporting capabilities, mobile solutions, electronic invoice dashboards, and analytics for all invoices. It allows organizations to successfully drive the transformation of their accounts receivable departments to overcome the challenges of manual and paper-based processes. This will supplement the growth of the regional market during the forecast period. 

Report Scope of the U.S. Factoring Services Market

Category Insights

The domestic segment accounted for the largest market share of 77.4% in 2021. The segment growth can be attributed to the rapid adoption of the factoring receivable methods in major industries due to its effectiveness. Furthermore, the increasing effectiveness of electronic invoices and the results of the government’s efforts in several states in the region, such as creating a competitive marketplace and creating high-quality jobs, to boost private consumption (to measure the money spent by the consumers in the country to buy goods and services), is the key driving factor for the growth of the segment.

The international segment is expected to grow at a CAGR of 8.12% during the forecast period owing to the rise in open trade accounts, especially from suppliers in emerging economies. The major importers or suppliers in developed countries are considering factoring as a suitable alternative to conventional forms of trade finance, which is further expected to drive the demand for the factoring services in the U.S. and other North American countries. Additionally, a growing number of Chinese manufacturers are moving production to countries in North and South America to avoid ongoing trade wars, which is further expected to boost the growth of the market.

Type Insights

The recourse segment accounted for the largest market share of 61.9% in 2021. This factoring is extensively used in U.S. organizations. It helps the client raise funds in one go rather than waiting for each debtor to come up with the payment. The recourse factoring offers all facilities except debt protection. Furthermore, the recourse factoring services are used by firms who have creditworthy invoice clients and when they want to sell their invoices at the lowest discounts. The fact that firms pay smaller factor fees and receive the maximum money possible for invoices is what makes this segment used widely among businesses.

The non-recourse segment is expected to grow at a CAGR of 8.7% during the forecast period. The growth of the segment can be attributed to the advantages offered by factoring services, such as full credit cover offered by the financing companies and debt security. Non-recourse factoring can be a good option for businesses with a large customer base, as businesses may want to clean up their balance sheet by offloading their accounts receivable. Moreover, small and medium-sized businesses are expected to be leading buyers of this service. These capabilities will supplement the growth of the segment during the forecast period.

Financial Institution Insights

The banks segment accounted for the largest market share of 85.8% in 2021 owing to the growing adoption of blockchain technology platforms by several banks in the U.S. Several banks provide factoring services, such as Wells Fargo and Morgan Stanley, which perform an important trade finance service by helping to convert the user’s receivables into cash, thus helping tide over constraints of cash flow and working capital. Moreover, banks and financial services companies are constantly trying to upgrade their expertise on the technological and operational levels for providing cost-effective services to their customers and boosting the demand for their services.

The Non-Banking Financial Institutions (NBFIs) segment is expected to grow at a CAGR of 9.7% during the forecast period. The growth in the fintech companies and non-banking financial startup companies, such as Coinbase, Ripple, and Toast, Inc., among others, is the major factor propelling the growth of the market in the U.S. For instance, Ripple, an enterprise blockchain company, is using Integrated Ledger Protocol (ILP), an open-source ledger that connects across different banks’ proprietary ledgers through connectors for peer-to-peer transactions. This inter-ledger allows any financial institution to connect its core system to transact within the network. These developments in the region are expected to boost the growth of the segment.

End-use Insights

The manufacturing segment held a market share of 31.11% in 2021. The segment growth can be attributed to the increased funding options for micro and small & medium-sized manufacturing units, improved inventory management, and effective working capital management. Moreover, the growing regulatory scrutiny coupled with enhanced customer satisfaction, as well as enhancing production processes, and the creation of innovative products, which facilitate employees for streamlining work while retaining the precision, are some of the factors responsible for the growth of the segment during the forecast period.

The transport & logistics segment is expected to grow at a CAGR of 8.7% during the forecast period. The segment growth can be attributed to the benefits offered by freight factoring companies, such as paying drivers, buying fuel, fast funding, and value-added support services, which produce the ideal funding solutions for new and growing transportation companies in the U.S. Furthermore, these features continue to propel invoice factoring in the transportation industry even further forward, as a viable cash flow solution increasing its popularity as a form of business financing. Due to this, invoice factoring remains a primary source of funding for the transportation & logistics industry.

Some of the prominent players in the U.S. Factoring Services Market include:

• HSBC Group
• BNP Paribas
• Barclays Plc
• RTS Financial Services, Inc.
• TCI Business Capital
• Riviera Finance of Texas, Inc.
• CIT Group Inc.
• Triumph Business Capital
• Breakout Capital, LLC
• Charter Capital Holdings LP

Segments Covered in the Report

This research report offers market revenue, sales volume, production assessment and prognoses by classifying it on the basis of various aspects. Further, this research study investigates market size, production, consumption and its development trends at U.S. for the period of 2017 to 2030

• By Category
• Domestic
• International
• By Type
• Recourse
• Non-recourse
• By Financial Institutions
• Banks
• Non-Banking Financial Institutions (NBFIs)
• By End-use
• Manufacturing
• Transport & Logistics
• Information Technology
• Healthcare
• Construction
• Others (Media & Entertainment, Energy & Utilities, and Telecommunications)

Key Points Covered in U.S. Factoring Services Market Study:

• Growth of U.S. Factoring Services in 2022
• Market Estimates and Forecasts (2017-2030)
•  Brand Share and Market Share Analysis
•  Key Drivers and Restraints Shaping Market Growth
•  Segment-wise
•  Competition Mapping and Benchmarking
•  Recommendation on Key Winning Strategies
•  COVID-19 Impact on Demand for U.S. Factoring Services and How to Navigate
•  Key Product Innovations and Regulatory Climate
•  U.S. Factoring Services Consumption Analysis
•  U.S. Factoring Services Production Analysis
• U.S. Factoring Services and Management