Factoring Volume Increases Despite Broader Market Challenges

The Secured Finance Network (SFNet), an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses, has released results of its mid-year factoring survey, which found an increase in factoring volume during the first half of 2025 despite broader economic challenges.

The U.S. economy grew 3.3% in the second quarter, but much of that was due to a tariff-driven imports swing, with core growth at 1.9%, according to a recent SFNet presentation. Job gains have slowed sharply and unemployment is edging up, while inflation is ramping as tariffs raise prices. This combination of weaker growth and rising inflation leaves the Fed balancing risks, cutting rates in September but signaling uncertainty about further moves.

That said, the factoring sector remains healthy and optimistic. Overall, according to the mid-year survey, factoring volume increased by 3.5% among respondents that reported in both H1 2024 and H1 2025. The reasoning behind that growth is two-fold: borrowers are finding it harder to get loans from banks, and factors are stepping in to fill that gap.

“Much of this expansion has been fueled by a steady flow of new business across a broader range of industries and geographies, demonstrating the depth and breadth of this important source of capital,” said SFNet CEO Rich Gumbrecht. “Respondents reported that deal sizes have modestly increased, with larger ticket transactions more frequently exceeding $2 million in funds in use.”

“Additionally, new client onboarding times have shortened, as firms invest in digital underwriting and faster verification systems,” he continued.

The combined factoring sentiment score edged down from H2 2024 to H1 2025, dropping 3.4 to 67, with anything over 50 considered positive, suggesting that factors are mostly optimistic in their outlooks for the industry. General U.S. business conditions are softer but steady, slipping 13.6 to 50, while confidence in portfolio performance declined 4.5 to 72.7.

Total funds in use soared 13% among factors reporting in both H2 2024 and H1 2025. Average days sales outstanding ticked up 1.7 days to 47.6.

Full quarterly and annual data reports are available here: https://www.sfnet.com/home/industry-data-publications/industry-insights-trends/asset-based-lending-factoring-surveys

About Secured Finance Network

Founded in 1944, the Secured Finance Network (formerly Commercial Finance Association) is an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses. With more than 1,000 member organizations throughout the US, Europe, Canada and around the world, SFNet brings together the people, data, knowledge, tools and insights that put capital to work. For more information, please visit SFNet.com.

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