Industry Analysis & Industry Trends
The Factoring industry experienced annualised revenue growth of 1.4% over the past five years. Industry revenue in 2011-12 totalled £2.37 billion, a growth of 2.9% from the previous year. While IBISWorld estimates that the next five years will see the industry achieve slightly stronger revenue growth, the nature in which this will be achieved will be quite different.
Over the five years through 2011-12, the industry concentrated on accessing as much funds as it could at the cheapest possible rates and subsequently lending them to businesses of all types purely to generate growth in their lending books. To do so, they lowered their lending standards and lent to less creditworthy customers as the market reached saturation point... purchase to read more
Industry Report - Industry Investment Chapter
Factoring enterprises and businesses involved in the provision of short-term commercial finance invest a significant proportion of their revenue in financing technology infrastructure, property and equipment to enable them to deliver their services. However, these costs are miniscule compared with their level of expenditure apportioned to funding labour costs. This is reflected by a capital-to-labour ratio of 1:8.9, which indicates that £8.9 is spent on labour for every pound of capital expenditure undertaken.
IBISWorld uses the industry's depreciation expense as a proxy for capital expenditure, which is estimated to account for 1.4% of total industry revenue in 2011-12. Labour costs, represented by wage expense, account for about 12.5% of revenue... purchase to read more