The debt financing market is anticipated to expand at a CAGR of 10.5 % from 2025 to 2031. An increasing number of partnerships, mergers, and acquisitions are fueling the market growth.
Debt Financing Market Analysis
Growing partnerships, mergers, and acquisitions are some of the main trends in the debt finance market that are driving the expansion of the industry. For example, Goldman Sachs Group, Inc. purchased GreenSky, Inc. in March 2022 in order to grow its clientele and offer straightforward financing options for improvements. Goldman Sachs Group, Inc. and NN Group N.V. reached a deal in August 2021 for the acquisition of NN Investment Partners, a renowned asset management firm in Europe. In order to bolster its elite, integrated investment bank, Morgan Stanley purchased Eaton Vance Corp. in March 2021 with the intention of bringing in additional fee-based income. During the projected period, a rise in partnerships, mergers, and acquisitions would fuel the debt finance market's expansion. Thus, these factors mentioned above are essential for the debt financing market growth.
Accounting Services Overview
- Debt financing is the process of raising cash by taking out loans from investors or banks and pledging to pay back the money borrowed plus interest over a predetermined length of time. This is a common method used by governments and businesses to finance projects, investments, and operations.
- It comprises getting money through different channels, such as bonds or loans, and putting it to use for different things like working capital, capital expenditures, or business growth. The borrower and the lender negotiate terms of debt financing, such as interest rates and repayment plans. The borrower's creditworthiness and the overall state of the economy have a big impact on the loan financing terms.
Strategic Insights
Debt Financing Market Drivers and Opportunities
The tax-deductible debt interest costs
- The fact that debt interest expenses are completely tax deductible and give consistency to corporate organizations worldwide in their planning and budgeting is one of the major advantages of debt financing. By doing this, a company's net tax obligation at year's end is decreased.
- Moreover, debt financing is a simple and available choice for companies worldwide, regardless of size. This is due to the fact that debt financing is tax deductible. Startups and small- to medium-sized businesses worldwide are using debt financing since it helps them plan their monthly and annual budgets and improves their credit score by allowing them to make their EMI payments on time. During the projected period, these factors will propel the growth of the debt finance market. As a result, this is a key driver of the expansion of the debt financing market growth.
Debt Financing Market Report Segmentation Analysis
- Based on the type, the segment with the biggest market share in 2023 was bank loans, which were made widely available, flexible, and easy for borrowers to get. A common and significant kind of debt financing is bank lending, in which borrowers take out loans from banks or other financial organizations. The consumer may designate these loans as secured or unsecured. Secured bank loans are backed by collateral as opposed to unsecured loans, which are determined by the borrower's creditworthiness and stability.
Debt Financing Market Share Analysis by Geography
The scope of the debt financing market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. Asia Pacific (APAC) is experiencing rapid growth and is anticipated to hold a significant debt financing market share. The region's significant economic development, growing population, and increasing focus on financial inclusion across diverse economies have contributed to this growth. In recent years, the APAC region has nearly led the globe in economic growth, mostly due to the debt financing market's contribution to the construction of airports, apartment buildings, bridges, highways, and other infrastructure. APAC’s non-banking industry is expanding quickly, bringing with it a plethora of chances for aspiring investors. That being said, the real estate industry has been the driving force behind the majority of the significant financial agreements in Asia. In this province, China, India, Australia, Indonesia, and Vietnam are thought to be the markets with the fastest growth.
Debt Financing Market Report Scope
The "Debt Financing Market Forecast" was carried out based on types, end users, and geography. In terms of type, the market is segmented into bank loans, bonds, debenture, bearer bonds, and others. Based on duration, the debt financing market is segmented into the short-term and long-term. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.
Debt Financing Market News and Recent Developments
Companies adopt inorganic and organic strategies such as mergers and acquisitions in the debt financing market. A few recent key market developments are listed below:
- In October 2023, Deutsche Bank AG acquired Numis Corporation Plc. This acquisition signifies the strengths and the blending of the esteemed reputations of both brands, both within the United Kingdom and on an international scale.
[Source: Deutsche Bank AG, Company Website]
Debt Financing Market Report Coverage & Deliverables
The market report on “Debt Financing Market Size and Forecast (2021–2031)”, provides a detailed analysis of the market covering below areas-
- Market size & forecast at global, regional, and country- level for all the key market segments covered under the scope.
- Market dynamics such as drivers, restraints, and key opportunities.
- Key future trends.
- Detailed PEST & SWOT analysis
- Global and regional market analysis covering key debt financing market trends, key players, regulations, and recent market developments.
- Industry landscape and competition analysis covering market concentration, heat map analysis, key players, recent developments.
- Detailed company profiles.
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Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
The global debt financing market is expected to grow at a CAGR of 10.5 % during the debt financing market forecast period 2024 - 2031.
Growing partnerships, mergers, and acquisitions are anticipated to play a significant role in the global debt financing market in the coming years.
The tax-deductible debt interest costs are the major factors that propel the global debt financing market.
The key players holding majority shares in the global debt financing market are Barclays PLC, Citigroup Inc., Credit Suisse Group AG, Deutsche Bank AG, and JPMorgan Chase and Co.
- Barclays PLC
- Citigroup Inc.
- Credit Suisse Group AG
- Deutsche Bank AG
- JPMorgan Chase and Co.
- Larsen and Toubro Ltd.
- Morgan Stanley
- Bank of America Corp.
- European Investment Bank
- Banco Santander SA
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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