The Secured Finance Network (SFNet) released results of its year-end factoring survey, which found a decline in factoring volume during the second half of 2024, but an overall positive sentiment moving forward in the face of economic uncertainty.

The U.S. economy had a mixed start to 2025, with a strong labor market balanced by weakening consumer spending and confidence. The ongoing discussion around tariffs continues to add uncertainty, potentially slowing growth and raising inflation. Despite these challenges, the factoring industry remains resilient due to its stability in slower economies.

“While the survey reflects a decline in factoring volume, it is regarded as episodic and temporary,” said SLR Business Credit CEO Jeffrey Goldrich. “Asset quality remains strong and, even in light of tariff impositions, it is expected that as banks retreat from perceived riskier exposures, factored volume and net funds employed will increase. As always, we will remain vigilant in monitoring accounts receivable performance and quality.”

Overall, factoring volume decreased by 3.9% from the second half of 2023 to the second half of 2024 among survey respondents. The decline was mainly driven by a decrease in U.S. volume, which offset growth in international volume.

The combined factoring sentiment score was nearly unchanged in the second half of 2024, edging up 1.7 to 70.5, with anything over 50 considered positive. Although the survey responses were collected before tariffs were announced, the increase indicates that factors remain mostly optimistic in their overall outlook for the industry. General U.S. business conditions rose 1.1 to 63.6, while portfolio performance jumped 6.4 to 77.3.

Total funds in use decreased by 1.7% among factors reporting in both the first and second half of 2024. Average days sales outstanding was nearly unchanged at 45.8 days in the second half of the year.

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