CreditHub: Financial Services
Across specialty finance, mortgage lending, and payments infrastructure, 2023–24 has seen dynamic shifts shaped by interest rate resets, inflation pressures, and accelerating digitalisation. Non-bank lenders, fintech platforms, and specialised financiers are playing an increasingly vital role—bridging capital gaps, targeting underserved segments, and innovating in how credit and transactions are delivered.
Market Overview
Growth with complexity: Credit risks evolve as funding tools deepen
Leasing volumes have rebounded strongly across Europe and North America. After a sharp decline in 2020, new business levels have now exceeded pre-COVID highs, driven by capital investment in automation and renewable-energy infrastructure. Businesses are favouring leasing over outright purchase to manage liquidity—especially amid high rates and budget uncertainty.
Invoice finance remains a vital working capital tool, particularly for companies facing 60–120 day terms, especially in construction, wholesale and manufacturing. Growth drivers include high inflation inflating invoice nominal values, increased adoption in Asia, China, and Africa, and competition between bank and independent factors.
- Dilution risk from buyer-side disputes.
- Reduced visibility in non-notification arrangements; Hidden systemic risk from buyer concentration in construction, retail or logistics
Large corporate buyers are increasingly using SCF to support suppliers—providing early payment in exchange for invoice assignment and often negotiating favourable terms. This has created a new class of receivables: fintech-originated, buyer-risk dependent, and globally distributed.
ABL continues to grow across the UK and US, with non-bank lenders and bank-owned specialty units offering working capital lines secured on receivables, inventory, and in some cases, plant and machinery. For firms locked out of bond markets or equity raises, ABL offers accessible funding at a known cost.
- Residual value slippage on tech and transport assets
- Reverse-factoring dependencies and buyer concentration risk
- Non-notification invoice discounting eroding visibility
- Dilution risk from buyer-side disputes (increasing)
- ABL receivables degradation during cash crunches
- Implement enhanced documentation standards for cross-border transactions
- Develop specialised recovery processes for different asset classes
- Establish early warning systems for buyer concentration risks
- Create jurisdiction-specific enforcement protocols
- Specialty finance lenders should prioritize standardized documentation, establish asset class-specific recovery processes, and implement early warning systems.
- Jurisdiction-specific enforcement protocols will further safeguard against cross-border transaction risks.