Small Employer Firms Less Likely to Seek Out Factoring Than a Decade Ago

The percentage of small employer firms (< 500 employees) that applied for financing or credit that sought out factoring specifically, has dropped over time, according to the Small Business Credit Survey conducted by the Federal Reserve. deBanked pulled the responses published over the last 10 years to compare and found a noticeable change.

Percentage of financing applicants that sought factoring by year:

• 2015: 3%
• 2016: 7%
• 2017: 4%
• 2018: 4%
• 2019: 3%
• 2020: 4%
• 2021: 3%
• 2022: 4%
• 2023: did not ask
• 2024: 2%
• 2025: 2%

The anomalous 7% figure in 2016 is likely due to confusion over factoring with merchant cash advances. The Federal Reserve did not ask respondents if they had sought out merchant cash advances specifically until the 2017 study, at which point they discovered that 7% had actually sought out MCAs in 2017 and only 4% had sought out traditional factoring.