With the largest revenue share, the domestic segment dominated the market in 2024. Domestic factoring services help local businesses turn their accounts receivables into immediate cash, crucial for their operations. The rise in credit purchases and the importance of electronic invoices have strengthened the domestic factoring market. A key factor driving this market is the growing need for liquidity among small- and medium-sized enterprises (SMEs) facing cash flow problems due to delayed client payments. In contrast, the international segment is projected to have the highest growth rate from 2025 to 2034. International factoring allows businesses to offer credit terms to foreign buyers, overcoming risks tied to international trade. This service simplifies international transactions by funding invoices upfront and alleviating the associated risks, thus helping businesses grow their foreign sales and overall financial health.

In terms of type, the recourse segment led the market in 2024. Recourse factoring lets businesses sell their receivables to a factoring company but requires them to buy back any unpaid receivables after a certain time. This reduces the risk for the factoring company and usually results in lower fees and higher cash advances. It is a good choice for businesses with reliable customers and good credit histories. However, it is anticipated that in the upcoming years, the non-recourse segment would expand at the fastest rate. In non-recourse factoring, the financing company takes on the risk of unpaid invoices, providing a safety net for businesses. This type is beneficial for companies with extensive customer bases, allowing them to manage their accounts receivable more effectively and access working capital quickly for various financial obligations.

Regarding financial institutions, banks were the largest players in the market in 2024. Institutions like Southern Bank Company, Mizuho Financial Group, and Deutsche Factoring Bank provide factoring services, helping businesses meet immediate cash flow needs such as inventory payments and operational expenses. By purchasing accounts receivables at a discount, banks enable businesses to receive funds quickly rather than awaiting customer payments. The market for non-banking financial institutions (NBFIs) is predicted to develop at the fastest rate over the next ten years. These institutions provide flexible and customised factoring arrangements that traditional banks might not be able to give, and they can modify their offerings to better meet the needs of certain businesses.

In terms of end-user, the manufacturing sector dominated with the largest revenue share in 2024. Manufacturers use factoring services to quickly convert receivables into cash for operating expenses, preferring it over loans due to lower interest costs and less paperwork. This enables them to maintain financial stability and optimize their processes. The healthcare sector is projected to experience the highest growth rate from 2025 to 2034, as it encounters payment delays from outdated billing systems. Healthcare factoring services allow hospitals to access immediate cash to manage essential medical supplies effectively, addressing cash flow disruptions caused by late payments.

The factoring services market in Europe held the largest market value share in 2024, driven by its strong industrial sectors like automobiles and manufacturing. Meanwhile, the Asia Pacific region is projected to grow rapidly from 2025 to 2034 due to its dynamic business environments and rising entrepreneurial activities. Countries such as China, India, and many Southeast Asian nations are industrializing quickly, making factoring services essential for meeting the financing needs of expanding businesses.

Market Competitive Landscape

BNP Paribas and CIT Group own a sizable portion of the market. To meet the needs of a wider range of industries and customer expectations, CIT Group is diversifying its offering of factoring services. This includes launching new factoring products customised to certain industries or creating unique financing solutions that integrate factoring with other financial products. 

BNP Paribas focusses on developing client relationships and providing value-added services to retain and attract clients in the competitive factoring services sector. This includes offering clients with personalised financial advice, access to industry expertise, and networking opportunities in order to create long-term relationships.