Factoring slumped 20% to a volume of US$115bn in the US in 2002 compared to the previous twelve months, according to Factors Chain International (FCI), a global network of factoring companies. The business grew rapidly in the late 1990s, doubling in volume between 1998 and its peak in 2001. Nearly 97% of all transactions concern domestic trade, as factoring remains a minor technique for the financing of international commerce with the US.
Factoring has grown in popularity as a financing technique because it allows a firm to secure financing and pass along the collection and servicing risks that accompany outstanding invoices.
