The oldest form of commercial finance is having a notably good year. Global factoring turnover surpassed four trillion euros for the first time in 2025, reaching €4,039 billion (roughly $4.7 trillion at current exchange rates), a 3.7% increase over the €3,895 billion recorded in 2024, according to FCI, the global representative body for factoring and receivables finance.1 The milestone reflects what FCI described as the continued resilience and relevance of factoring in supporting the real economy through tighter liquidity and shifting trade patterns.1
For a discipline often treated as a back-office relic, the trajectory is striking. FCI reported that factoring has grown at a compound annual rate of 7.8% over the past two decades.2 And the 2025 advance came after a year of consolidation: 2024 turnover rose only 2.7%, which FCI characterized as a pause after three years of strong post-pandemic recovery.2 The asset class is not merely surviving the higher-rate environment; it is compounding through it.
The American Turn
Nowhere was the 2025 acceleration sharper than in the United States. FCI reported that North America grew 35.1% to reach €160 billion (approximately $184.6 billion), driven mainly by the United States, which grew 35.5%.1 That figure should be read with its methodology in mind, since regional totals reflect the activity of reporting members and an advance of that magnitude owes something to broader and more complete reporting as well as to genuine new volume. But the direction is unmistakable, and it reverses a soft patch that domestic data had captured a year earlier.
The Secured Finance Network found factoring volume among its survey respondents declining 3.9% from the second half of 2023 to the second half of 2024, a drop driven mainly by lower U.S. volume.3 By the association’s most recent survey, covering year-end 2025 results, factoring volume had swung to a 16.6% year-over-year gain.4 The receivable, it turns out, behaves counter-cyclically: when cash-flow lenders tighten, working-capital finance against invoices becomes more attractive, not less.
Why Receivables Finance Gains When Credit Tightens
The appeal of factoring in the current environment is structural rather than sentimental. Factoring advances against a self-liquidating asset, the receivable, and ties repayment to the borrower’s customers rather than to its enterprise value or its EBITDA multiple. When higher rates and softer demand compress the cushions in cash-flow lending, the discipline of advancing against verified invoices looks comparatively safe. FCI made the same point in commercial terms, noting that working-capital optimization has become a strategic priority for companies of all sizes and that receivables finance is now an integral component of modern trade rather than a cyclical instrument.1
The collateral has been performing. The Secured Finance Network’s factoring survey reported a portfolio-performance sentiment score of 77.3 in the second half of 2024, up more than six points, with average days sales outstanding nearly unchanged at 45.8 days.3 Steady DSO and improving portfolio scores are the kind of unglamorous readings that keep advance rates intact and loss content low, exactly what a lender wants from collateral when the macro picture is uncertain. They also explain why turnaround advisors and asset-based lenders increasingly steer working capital-starved borrowers toward factoring rather than additional cash-flow leverage.
The mechanics reinforce the safety. In a notification arrangement, the factor collects directly from the borrower’s customers, converting a dispersed pool of trade receivables into a controlled cash-flow stream; even in non-notification structures, the lender underwrites the credit of the account debtors rather than the borrower alone. That dual- credit feature, looking through to the strength of a borrower’s customers as well as the borrower itself, is why factoring loss content has historically run below that of unsecured and cash-flow lending through downturns, and why it appeals to lenders positioning portfolios for a softer credit environment.
The resurgence also widens the aperture for the broader dealmaker ecosystem. Asset-based lending desks increasingly pair revolving facilities with factoring or supply-chain finance to serve borrowers whose receivables outgrow a conventional borrowing base, while turnaround advisors use factoring as a bridge that keeps a stressed company liquid without piling on cash-flow leverage. For investment bankers advising lower-middle-market companies, a receivables-finance option expands the menu of capital available to clients that private credit funds, focused on larger and sponsor-backed credits, are not structured to serve.
A Global Market, Increasingly Led by Emerging Demand
The global picture frames the U.S. rebound. Europe remained the largest regional market at roughly €2,658 billion, or 65.8% of world turnover, while Asia-Pacific reached about €995 billion, with China alone recording €713 billion.1 FCI attributed much of the industry’s forward momentum to emerging markets, where constrained access to traditional bank financing reinforces the role of receivables finance as a means for smaller firms to participate in global trade.1
That structural argument is relevant to U.S. participants because it points to where the next decade of volume originates: in supply chains and open-account trade rather than in the leveraged-buyout machine that dominates private credit. As trade corridors regionalize and corporates push working-capital risk down their supply chains, the addressable market for factoring, reverse factoring, and supply-chain finance widens, giving specialty lenders a deployment channel that does not depend on sponsor deal flow.
Banks and NonBanks Diverge
Beneath the headline growth, the competitive map is shifting. The Secured Finance Network’s asset-based lending data for the fourth quarter of 2024 showed nonbank lenders posting a 9% year-over-year gain in new commitments and a 25.7% increase in outstandings, while banks recorded double-digit declines in both.5 Confidence did not follow that same split, however: both bank and nonbank lenders posted their highest sentiment readings in three years, with banks climbing 7.1 points to 63.2 and nonbanks rising 8.7 points to 65.8.5
That gap has since narrowed and, in places, reversed. The association’s year-end 2025 survey showed bank sentiment improving to a combined score of 62 while nonbank sentiment slipped to 58, as softer outlooks for utilization, hiring, and portfolio performance offset modest gains elsewhere.4 The pattern is consistent with a market in which banks, having retrenched, are selectively returning to secured lending while the independents that filled the gap now face stiffer competition for the same receivables.
The implication for borrowers is a wider and more competitive field of working-capital providers than at any point since the regional bank retrenchment of 2023. Banks bring lower pricing and deposit relationships; independents bring speed, flexibility and a willingness to lend through the covenant or performance hiccups that make a bank uncomfortable. For the companies caught between the two, the resurgence of factoring is less an abstract market statistic than a concrete expansion of the capital actually available against their receivables.
Conclusion
Factoring’s resurgence is a useful corrective to the narrative that secured finance is a sideshow to private credit. A €4 trillion ($4.62 trillion) global market growing through a high-rate cycle, a U.S. segment that has swung from contraction to double digit growth, and collateral that continues to perform are not the markers of a declining business. The competitive question is who captures the rebound. With banks circling back and nonbanks defending hard-won share, the firms that win will be those that can underwrite receivables quickly, monitor them continuously and price the genuine risk in the invoice rather than the story around the borrower. In a tighter credit environment, the self-liquidating asset is quietly back in fashion. •
1“FCI Releases 2025 World Industry Statistics as Global Factoring Market Surpasses €4 Trillion,” FCI, May 5, 2026.
2“FCI Release 2024 World Industry Statistics showing the Factoring Market Remains Stable,” FCI, May 19, 2025.
3“Secured Finance Network Releases Factoring Survey,” Secured Finance Network, April 21, 2025.
4“SFNet Data Highlights Strong Year-End Performance in ABL and Factoring,” Secured Finance Network 2025 ABL & Factoring Survey via Business Wire, April 15, 2026.
5“SFNet Releases Q4 2024 Asset-Based Lending and Confidence Indexes,” Secured Finance Network, May 10, 2025.
Lisa H. Rafter is publisher of ABF Journal.