After several years of expansion, the factoring market is showing signs of losing momentum. While activity continues to be supported by companies’ liquidity needs, longer payment terms and rising insolvencies, geopolitical uncertainty is weighing on its trajectory. To sustain its development, the industry is focusing on greater adoption among SMEs, the emergence of digital solutions and technological innovation. After several years of growth, factoring appears to be losing momentum. This financing solution enables companies to rapidly convert trade receivables into cash. The principle is straightforward: businesses assign their invoices to a specialist financial institution, known as a “factor”, which advances part of the invoice value before the due date and then manages collection from customers. Beyond improving cash flow and reducing days sales outstanding, factoring also provides protection against credit risk, depending on the structure used. “Historically, the factoring market experienced double-digit growth. This was followed by a sharp decline during the Covid period, then a post-Covid rebound,” recalls Marc Balaguer, Sales Director at BNP Paribas Factor. Inflation in recent years has also supported the industry: as prices rise, invoice values increase mechanically, driving higher volumes financed by factors.
Moderate growth in 2025
However, over the past three years, factoring has lost momentum, with the sector recording only modest growth. According to the Association Française des Sociétés Financières (ASF), market volumes increased by 1.9% to €439.4 billion. While the market showed signs of recovery at the end of 2025, expectations for a stronger rebound in 2026 have been weakened by renewed geopolitical tensions in the Middle East, which are fuelling economic uncertainty. The factoring industry is already feeling the impact: in Q1 2026, activity declined by 0.3% to €104.6 billion, according to ASF data.
Securing accounts receivable
While factoring providers are observing a slowdown at the start of the year, they also identify several drivers that could support future growth. In a context marked by a rise in corporate insolvencies, companies are increasingly focused on securing their receivables. This trend creates favourable conditions for factoring, which provides both working capital financing and, depending on the structure, protection against non-payment risk. Longer payment terms, observed across many sectors, are also reinforcing corporate interest in this form of financing. More broadly, the business environment remains shaped by successive crises and ongoing uncertainty. “In this context, factoring is perceived as a secure, stable and flexible financing solution, which may encourage more companies to use it,” notes Marc Balaguer. This appeal is further strengthened by intense competition in the market, which is limiting the scope for price increases, he adds.
A lever for corporate transformation
Beyond cyclical factors, corporate transformation phases are also key growth drivers for the sector. International expansion, market entry, diversification, changes in ownership structures and temporary liquidity pressures are all situations that support the use of factoring, explains Maxime Bertin, Managing Director of Fibus, a factoring advisory firm. The market also retains significant untapped potential. “Factoring is still relatively unknown and sometimes misunderstood, particularly among SMEs. The key challenge is to offer simpler solutions in order to reach a broader range of companies,” says Luc Belleil, Deputy CEO of Crédit Mutuel Factoring. The objective for industry players is therefore to further democratise access to this financing tool and increase penetration among small and medium-sized businesses.
Fintechs entering the market
This drive to make factoring more accessible is paving the way for new entrants. “It is natural to see innovative, digital solutions emerging from fintechs. Established factors are also continuing to enhance their online offerings,” explains Luc Belleil. By focusing on simplified processes, digital tools and greater flexibility, fintechs aim to meet the needs of SMEs and micro-enterprises that do not always turn to traditional factoring solutions. One example is Karmen, a fintech founded in 2022. “Our solution, Karmen Factor, is similar to factoring in that it enables companies to collect invoice payments, but without assigning the receivables,” explains Gabriel Thierry, Co-founder and CEO of Karmen. In a traditional factoring structure, receivables are assigned to a factor, making the transaction visible to the debtor. With Karmen Factor’s approach, companies can finance their receivables while retaining ownership of their invoices, meaning the operation remains invisible to the end customer. “Our solution is exclusively designed for SMEs and micro-enterprises and enables a broader range of receivables to be financed compared with traditional factoring providers. Because they purchase receivables, traditional factors tend to focus on the safest assets, often those from large corporates or CAC 40 companies. This limits their scope,” he adds. While traditional factoring remains well suited to companies seeking receivables protection and outsourced collections, fintechs place greater emphasis on speed of funding, discretion and flexibility in underwriting criteria. These two approaches address different needs, but both contribute to expanding the range of financing solutions available to companies.
Fraud under scrutiny
As the market expands and offerings diversify, providers must remain highly vigilant to inherent risks. Because factoring is based on the financing of trade receivables, it remains exposed to fraud risk. While debtor creditworthiness is generally secured through credit insurance mechanisms, the key challenge lies in verifying the existence and authenticity of the receivables being assigned.
In a more challenging economic environment, professionals are observing a rise in attempted fraud, although not an explosion of the phenomenon. “When economic conditions deteriorate, some companies may be tempted to commit fraud to address liquidity pressures,” confirms Marc Balaguer. However, the patterns observed remain well known to industry specialists. “Market participants have become better at detecting and mitigating them,” he notes. According to him, no major new fraud typologies have emerged in recent years. Attention is nonetheless turning to technological developments, particularly potential risks linked to artificial intelligence. In the future, technologies such as deepfakes could facilitate certain types of fraud. “But this is not yet a significant issue in factoring today,” says Marc Balaguer. Artificial intelligence is also seen as a protective tool. “AI can help improve risk and anomaly detection, particularly because it enables the processing of much larger volumes of data,” highlights Maxime Bertin. By enhancing factors’ analytical capabilities, AI is paving the way for a new generation of factoring.
Key figures
- Factors handled €435 billion of receivables in 2025, representing a +1.9% increase compared with 2024.
- With €270.3 billion of receivables financed in 2025, domestic factoring remains the largest component of activity.
- International factoring transactions increased by 5% year-on-year, reaching €169.1 billion of receivables financed.
- Export factoring accounted for €36.4 billion, up 14.4% year-on-year.
Source: Association Française des Sociétés Financières (ASF)
International activity driving the factoring market
While domestic factoring shows signs of stagnation, international transactions continue to act as a key growth driver. They increased by 5% in 2025, reaching €169.1 billion of receivables financed. Over the same period, export factoring recorded an even stronger performance, rising by 14.4% to €36.4 billion. This momentum is partly driven by the international subsidiaries of French groups, but also by the strong reputation enjoyed by French providers abroad. “Some foreign companies specifically seek solutions from French factors. Brokers also frequently involve French players in European tenders,” notes Marc Balaguer, Sales Director at BNP Paribas Factor. France also holds a distinctive position in this market. “France is the largest factoring market in Europe. Its offering is well structured and competitively priced,” explains Maxime Bertin, Managing Director of Fibus. Industry professionals also highlight the maturity of the French ecosystem. “French factors have strong expertise in this solution, which is highly robust,” confirms Luc Belleil, Deputy CEO of Crédit Mutuel Factoring & Factofrance. In an increasingly competitive European landscape, this expertise represents a key advantage in supporting the continued growth of international operations, which remain one of the main drivers of expansion for the sector.
E-invoicing is reshaping the factoring landscape
The rollout of electronic invoicing, which will be progressively introduced in France from 2026, could mark a turning point for the factoring market. The roadmap provides for a mandatory obligation to receive e-invoices for all businesses from September 2026, as well as an obligation to issue e-invoices for large corporates and mid-sized companies at the same date, before being extended to SMEs and micro-enterprises in September 2027. All transactions will be required to flow through certified platforms, with the aim of standardising and increasing transparency across invoicing processes. By enabling better tracking of the full invoice lifecycle (issuance, validation, payment), the reform opens the door to more granular working capital analysis and faster allocation to appropriate financing solutions. “E-invoicing will streamline processes. It should enable faster invoice analysis and reduce fraud risk,” notes Maxime Bertin, Managing Director of Fibus. For industry players, this shift also represents an opportunity for greater automation and standardisation of processes. “E-invoicing makes receivables more standardised, allows them to circulate more quickly through harmonised data, and facilitates the emergence of more digital factoring solutions,” explains Luc Belleil, Deputy CEO of Crédit Mutuel Factoring & Factofrance. By making financial flows more transparent and consistent, e-invoicing could further reinforce the role of factoring as a core tool in receivables management, while accelerating its digital transformation. “For users, it will bring real simplicity, and for financiers, it will also provide an additional layer of trust,” summarises Gabriel Thierry, Co-founder and CEO of fintech Karmen.
Source: Le Nouvel Economiste