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Factoring in the UK: Market Research Report

Market Research • Market Size • Industry Statistics • Industry Analysis • Industry Trends

Factoring Market Research Report | SIC K64.992 | Mar 2017

Important factors: Operators have benefited from high business confidence and changing legislation

IBISWorld’s Factoring market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

Report Snapshot
Market Share of Companies
Bibby Financial Services Ltd Bibby Financial Services Ltd market share
HSBC Invoice Finance (UK) Ltd HSBC Invoice Finance (UK) Ltd  market share
Lloyds TSB Commercial Finance Limited Lloyds TSB Commercial Finance Limited market share
RBS Invoice Finance RBS Invoice Finance market share
Industry Statistics & Market Size
Annual Growth 12-17
Annual Growth 17-22
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Industry Analysis & Industry Trends

Factoring is a short-term financing option to increase a business' liquidity. Operators also purchase accounts receivable and unpaid invoices at a discount in return for immediate receipt of money. Industry revenue is expected to grow at a compound annual rate of 3.8% over the five years through 2016-17. Over the past five years, demand for factoring services has been propelled by difficulties in securing conventional loans. Improving economic conditions, rising business confidence and an expansion in UK business numbers also contributed positively to the industry's performance. However, difficulties associated with adequate funding, strict lending criteria and the low interest rate environment constrained growth.

In 2016-17, revenue is expected to rise by 2.5% to £2.7... purchase to read more

Industry Report - Industry Analysis Chapter

Factoring allows a business to obtain up to 85% of the value of its outstanding invoices. After rendering a service or delivering goods, a business issues invoices to its customers. It can then sell those unpaid invoices to a factoring firm at a discount in exchange for cash. By selling their invoices, businesses essentially transfer the ownership of their customers’ debts to the factoring business lending them the funds. At this point, the factoring enterprise assumes all the rights and risks that come with those invoices, including any payments that customers make or fail to make. In exchange, they receive a fee associated with the transaction and a percentage of the total invoice amount held until payment is made, for example the remaining 15%.

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Industry ProductsRelated ReportsTable of Contents

What is the Factoring Industry?

Firms in this industry specialise in short-term debt financing and invoice discounting. Factoring involves a company selling its accounts receivables or invoices to a third party as a means of accessing cash to finance further business activity without having to wait for their debtors to pay them. Operators generate revenue through factor fees, or the difference between the price paid for the invoice and money received from debtors.

Industry Products
Domestic factoringInvoice discountingAsset-based loansOther factoring and related services
Industry Activities
FactoringInvoice discountingDebt financing

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