What Industries Use Factoring for Business Financing?

Any company generating accounts receivable with creditworthy customers can take advantage of the cash flow benefits offered through factoring.

In factoring, like any industry, there are certain clients that make up the greater share of business.

The textile and apparel industry has long dominated the factoring business, generally attributing to over half of the factoring volume.   This makes sense since factoring in the United States evolved from European textile mills using stateside agents to sell their fabrics.   Agents earned commissions on sales and then began establishing credit terms and advances to the mills for delivered goods.

Many other businesses also benefit from discounting their invoices to Factors. The most recent factoring survey results published by the Commercial Financing Association (CFA) reflects the following breakdown of U.S. factoring volume by industry:

Textile/Apparel Factoring                  54%

Furniture                                                                                  8%

Business Services                                                                7%

Electronics                                                                                        5%

Transportation                                                                        3%

Other                                                                                                        23%

The survey also reported $135.5 billion in factoring volume in 2007, sustaining its 30- year pattern of growth.   Follow the link to the Commercial Financing Association (CFA) site to review the complete annual survey results for asset based lending and factoring.