The increasing demand for alternative financing options, the growth of small and medium-sized enterprises (SMEs), the ease of access to funds, the high volume of credit card transactions, and the need for short-term cash flow are expanding the market reach of merchant cash advances.
Wilmington, Delaware, April 29, 2024 (GLOBE NEWSWIRE) -- Allied Market Research published a report, titled, " Merchant Cash Advance Market by Repayment Method [MCA Split, Automated Clearing House (ACH), MCA Lockbox], and Application (IT and Telecom, Healthcare, Manufacturing, Retail and E-commerce, Travel and Hospitality, Energy and Utilities, Others): Global Opportunity Analysis and Industry Forecast, 2024-2032" . According to the report, the "merchant cash advance market" was valued at $17,886.16 million in 2023, and is estimated to reach $32,658.23 million by 2032, growing at a CAGR of 7.2% from 2024 to 2032.
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Prime determinants of growth
The growth of the merchant cash advance market is influenced by the growing demand for alternative financing. Moreover, the growing adoption of digital payments, including credit and debit cards, has led to an increase in the volume of credit card transactions, making merchant cash advances a more viable option for businesses. On the contrary, the increasing use of technology in the financial services industry, such as the use of artificial intelligence and machine learning for underwriting and risk assessment, presents an opportunity for growth in the merchant cash advance market. In addition, the growing demand for short-term financing options, especially among seasonal businesses, presents an opportunity for growth in the merchant cash advance market.
Report coverage & details:
| Report Coverage | Details |
| Forecast Period | 2024–2032 |
| Base Year | 2023 |
| Market Size in 2023 | $17,886.16 million |
| Market Size in 2032 | $32,658.23 million |
| CAGR (2024-2032) | 7.2% |
| Segments Covered | Repayment Method, Application, and Region. |
| Drivers | Increase in demand for alternative financing options Growth of e-commerce and digital payments Flexible repayment structure |
| Opportunities | Integration with digital payment platforms |
| Restraints | High interest rates and fees Lack of regulation and transparency |
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The MCA split segment to maintain its leadership status throughout the forecast period
By repayment method, the MCA split segment held the highest market share in 2023, accounting for more than two-thirds of the global merchant cash advance market revenue, and is estimated to maintain its leadership status throughout the forecast period. This is attributed to the fact that this method of repayment where a fixed percentage of daily credit card sales is automatically remitted to the lender, makes it a convenient and flexible option for businesses with fluctuating sales. However, the automated clearing house (ACH) segment is projected to manifest the highest CAGR of 10.0% from 2024 to 2032. This method involves the automatic withdrawal of funds from a borrower's bank account to fulfill the repayment obligation. It offers convenience and reliability for lenders by ensuring timely repayments without relying on the borrower's manual initiation of payments. Moreover, it provides a structured and automated repayment process, reducing the risk of missed or delayed payments.
The retail and e-commerce segment to maintain its leadership status throughout the forecast period
By application, the retail and e-commerce segment held the highest market share in 2023, accounting for nearly one-fourth of the global merchant cash advance market revenue, and is estimated to maintain its leadership status throughout the forecast period. Retail and e-commerce businesses often turn to MCAs to navigate fluctuations in cash flow, capitalize on inventory procurement opportunities, or invest in marketing campaigns to bolster sales. The ability to obtain funding swiftly, often without the stringent requirements of traditional loans, makes MCAs an attractive choice for businesses in this sector, allowing them to adapt rapidly to market changes and seize growth opportunities. However, the IT and telecom segment is projected to manifest the highest CAGR of 12.4% from 2024 to 2032. This is attributed to the increasing demand for alternative financing options, the growth of small and medium-sized enterprises (SMEs), and the increasing use of technology in the financial services industry. The merchant cash advance market provides a flexible financing option for SMEs in the IT and telecom sector, which often face challenges in securing traditional financing options.
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North America to maintain its dominance by 2032
By region, North America held the highest market share in terms of revenue in 2023, accounting for more than one-third of the merchant cash advance market revenue and is estimated to maintain its leadership status throughout the forecast period. This is attributed to the increasing number of retailers seeking out short-term credit facilities to help cover short-term credit needs, as well as the capital markets tightening and banks becoming increasingly interested in alternative sources of income. However, Asia-Pacific is expected to witness the fastest CAGR of 10.7% from 2024 to 2032. This is attributed to the growing demand for alternative financing options and the growth of small and medium-sized enterprises (SMEs), as well as the increasing use of technology in the financial services industry.
Leading Market Players: -
- CAN Capital, Inc.
- Fundbox
- Kalamata Capital Group
- Lendio
- Libertas Funding, LLC
- National Business Capital
- OnDeck
- Perfect Alliance Capital
- Rapid Finance
- Reliant Funding
The report provides a detailed analysis of these key players in the global merchant cash advance market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.
Key Benefits for Stakeholders
- This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the merchant cash advance market analysis from 2024 to 2032 to identify the prevailing market opportunity.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- The Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network on the merchant cash advance market outlook.
- In-depth analysis of the merchant cash advance market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as merchant cash advance market trends, key players, market segments, application areas, and market growth strategies.
Merchant Cash Advance Market Key Segments:
By Repayment Method
- MCA Split
- Automated Clearing House (ACH)
- MCA Lockbox
By Application
- Healthcare
- Manufacturing
- Retail and E-commerce
- Travel and Hospitality
- Energy and Utilities
-
Others
- IT and Telecom
By Region
- North America (U.S., Canada)
- Europe (UK, Germany, France, Italy, Spain, Rest of Europe)
- Asia-Pacific (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
- Latin America (Brazil, Argentina, Rest of Latin America)
- Middle East and Africa (Gcc Countries, South Africa, Rest of Middle East And Africa)
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