What is the current size and annual growth rate of the reverse factoring market?
The reverse factoring market size has grown strongly in recent years. It will grow from $539.41 billion in 2024 to $592.1 billion in 2025 at a compound annual growth rate (CAGR) of 9.8%. The growth in the historic period can be attributed to the growing recognition of the benefits of supply chain finance, increasing adoption of digital technologies, increasing focus on optimizing working capital, need for improving cash flow management.
The reverse factoring market size is expected to see strong growth in the next few years. It will grow to $850.84 billion in 2029 at a compound annual growth rate (CAGR) of 9.5%. The growth in the forecast period can be attributed to working capital optimization demand, rising cost of traditional financing, increasing demand from manufacturing industry, technological advancements in reverse factoring, the growing importance of supply chain finance, growing popularity of online reverse factoring platforms .Major trends in the forecast period include the introduction of innovative financing solutions, integration with supply chain finance, advancements in emerging technologies, the introduction of sophisticated financial infrastructure, create value-added services.
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Which major factors have contributed to the expansion of the reverse factoring market?
The increasing adoption of reverse factoring by manufacturers is expected to propel the growth of the reverse factoring market going forward. Manufacturers are companies that produce goods using labor, machinery, and raw materials, transforming them into finished products for sale. The increasing adoption of reverse factoring by manufacturers is driven by enhancing supplier cash flow and ensuring consistent supply chain operations amid financial challenges. Reverse factoring in manufacturing enhances liquidity for suppliers, reduces payment disputes, and stabilizes production schedules. For instance, in November 2024, according to the Office for National Statistics, a UK-based government department, the net rate of return for manufacturing companies in Quarter 2 of 2024 was 7.3%, reflecting a modest increase of 0.1 percentage points from the 7.2% recorded in Quarter 1 of 2024. Therefore, the increasing adoption of reverse factoring by manufacturers is driving the growth of the reverse factoring market.
How is the reverse factoring market segmented?
The reverse factoring market covered in this report is segmented –
1) By Category: Domestic, International
2) By Financial Institution: Banks, Non-Banking Financial Institutions
3) By End-Users: Manufacturing, Transport And Logistics, Information Technology, Healthcare, Construction, Other End-Users
Subsegments:
1) By Domestic: Local Supplier Financing, Intra-Country Supply Chain Financing
2) By International: Cross-Border Supplier Financing, Global Supply Chain Financing
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Who are the top competitors in the reverse factoring market?
Major companies operating in the reverse factoring market are ICBC China Limited, JPMorgan Chase & Co., Bank of America Corporation, Banco Santander S.A., HSBC Holdings plc, Citigroup Inc., Wells Fargo & Company, Banco do Brasil S.A., ING Groep N.V., Barclays plc, Société Générale SA, Banco Bilbao Vizcaya Argentaria S.A., Deutsche Bank AG, Sumitomo Mitsui Banking Corporation, UniCredit S.p.A., Mizuho Financial Group Inc., Standard Chartered PLC, KBC Group NV, CaixaBank S.A., Accion International, PrimeRevenue Inc., Drip Capital Inc., Viva Capital Funding LLC, eFactor Network S.A.P.I. de C.V., Tradewind GmbH
Which key trends are expected to influence the reverse factoring market in the coming years?
Major companies operating in the reverse factoring market are focused on developing innovative offerings, such as digital reverse factoring solutions, to gain a competitive edge. Digital reverse factoring is a financial solution that enables suppliers to receive early payment for their invoices, often at a lower cost of capital than they could obtain on their own. For instance, in April 2022, Eurobank Factors, a Greece-based provider of factoring services, launched a digital reverse factoring solution to help small and medium-sized enterprises (SMEs) access financing based on the creditworthiness of their larger buyers. Reverse factoring lets suppliers turn invoices into cash without having to pledge additional collateral, while buyers can enhance their working capital and reinforce supplier relationships. The digital platform streamlines the reverse factoring process, enabling suppliers to upload invoices for early payment, which are then approved by the buyer. Eurobank Factors offers financing to the supplier, charging a small fee, and receives payment from the buyer on the invoice maturity date. This arrangement enables suppliers to access lower-cost funding based on the buyer’s credit rating rather than their own.
Which regional trends are influencing the reverse factoring market, and which area dominates the industry?
Europe was the largest region in the reverse factoring market in 2024. The regions covered in the reverse factoring market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
What Does The Reverse Factoring Market Report 2025 Offer?
The reverse factoring market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
Reverse factoring is a financial arrangement where a buyer facilitates early payment to its suppliers through a financial institution, which pays the suppliers at a discount in exchange for the buyer’s guarantee of full payment on the invoice’s original due date. Reverse factoring optimizes working capital for both buyers and suppliers within the supply chain by allowing suppliers to receive early payments and enabling buyers to support their suppliers’ cash flow needs.
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