From Factoring to Confirming: How Spain’s €401bn Trade Finance Market Is Evolving
In 2025, Spain’s factoring market continued to develop, despite marginal YoY decline. Factoring activity remained at similar levels during 2025 compared to 2024, however slightly decreasing over the 12-month period. The reported YoY decline occurred despite the factoring industry’s cumulative YoY annual growth of 7.2% over the past 7 years.
Overview
As Spain’s factoring market experienced a year of marginal decline, the confirming sector, displayed a relative increase in terms of both activity and growth.
In 2025, the factoring and confirming market reached €259.77 billion in total invoices financed, demonstrating a 1.16% YoY growth, and consolidating an 8.16% CAGR since 2021. Research indicates that the evolution of national factoring experienced a downward trend, whereas the evolution of confirming and payment orders increased by 4% within the same time period.
Factoring, confirming and economic landscape
Top line growth and segmentation of factoring versus confirming are important considerations. In 2025 total factoring in Spain reached €127.88 billion in volume, reduced from €130.38 billion in 2024; a reduction driven predominantly by national factoring, (on-shore/ off-shore factoring), which grew by 4.7% YoY. The confirming market showed signs of growth due to positive economic conditions, demonstrated via offering confirming lines to mid-caps and extending confirming lines to larger companies. In 2025 the Spanish factoring market consolidated two years with negative growth, however since 2021 the same market has achieved a CAGR above 7%. Spain’s factoring and confirming market is significant both in terms of its size and volume. In 2025 the Spanish Trade Finance carried out a factoring, confirming and purchase orders consolidation, growing the size of the market to €401.26 billion. To demonstrate the scale of the market, by EOY 2025 total factoring, confirming and purchase orders reached the monetary equivalent of 24.50% Spanish GDP. The buoyant factoring marketplace has shown an annual growth rate since 2018, reaching 8.3% per year, amounting to significant growth rates since 2021 (post pandemic) of 9.51% CAGR.
Industry analysis
Regional analysis is a key metric to consider when analysing factoring and confirming, and their respective impact on the European SME market. Within the international market, factoring is the metric normally used to measure market penetration vs GDP. Spain ranks fifth in Europe after France, Germany, UK and Italy in this order. However, when compared to major European countries, it holds the largest market penetration vs GDP. In 2024 the Spanish factoring market reached 16.7% while France reached 14.8%, Germany 9.3%, UK 12.2% and Italy 13.6% respectively.
As the economy remains buoyant and GDP continues to grow, the financing space is set to expand in line with these positive key macroeconomic indicators. It is important to understand the economic implications and investment opportunities offered by this market. This relative size of factoring versus GDP demonstrates a sizeable penetrable investment opportunity for SMEs. Factoring activity has remained largely at similar levels to previous years during 2025, whilst the confirming market has a greater weight with a total volume close to €270 billion. In 2025 the factoring market demonstrated a slight decline in growth, (-1.91% YoY), whilst the confirming market grew 4% over the same period. The decline in the factoring market can be attributed to marginal relative decline of domestic transfers. In 2025 international factoring resumed its growth trajectory from previous years, marking an increase exceeding 4%, the vast majority of which was derived from export factoring. National factoring with recourse continues its downward trend from the previous year in favour of factoring without recourse, which offers greater value to customers.
Increased M&A volume for Spanish SMEs
M&A activity has increased in the region, especially in the mid-market sector, demonstrating a rising need for companies to find alternative solutions to financing its working capital requirements. As companies merge, their capital structures grow, but lenders rarely increase their risk exposure at the same pace. Banks often cap their consolidated limits, meaning the acquirer cannot rely on the target’s existing factoring or confirming lines being carried over. This creates a funding gap in working capital needs, one that other financial institutions, and increasingly private credit and alternative lenders, are well positioned to fill. In a market with rising M&A activity, Spanish companies are naturally turning toward more flexible, alternative lending options
Further analysis shows how factoring acts as a useful mechanism for SMEs to helpmanage risk, operations and liquidity. Factoring enables SMEs to manage supply chain risk, improve business flow, optimise and exploit exposure to investment grade firms and ultimately how to manage and govern liquidity. An example of SMEs managing liquidity is evident via the onshore factoring market. Over the years, onshore factoring has demonstrated a preference towards financing lines without recourse, representing 78% of the market in 2025. Since 2023 when factoring with recourse reached €34.73 billion, it has fallen dramatically to €20.7 billion mainly to support the financing of working capital between SMEs. As discussed in last year’s report, this market behaviour is predominantly driven by an increasingly developed consolidated market of financial institutions following the financial crisis.
Looking Ahead
Whilst factoring decreased YoY in Spain, statistics show a robust consolidated CAGR of 8.1% since 2021. Despite this marginal YoY decline, in 2025 the factoring and confirming market represented approximately 25% of Spain’s GDP.
At Aluna Partners we believe this sizeable market allows SMEs constrained by consolidated financing limits, the ability to gain access to working capital via alternative lenders. This alternative capital solution is vital both in terms of providing market and company liquidity, but also enhancing business operations at SMEs.
