Global Debt Financing Market Report and Forecast 2024-2032

Global Debt Financing Market Outlook

The global debt financing market size was approximately USD 19.36 billion in 2023. The market is projected to grow at a CAGR of 8.3% between 2024 and 2032, reaching a value of nearly USD 40.46 billion by 2032.

Key Trends in the Market

Debt financing, also known as debt funding or debt lending, refers to the method of raising money or capital by selling debt instruments, including bonds or notes. Generally, the funds are repaid, along with interest, at an agreed date. Businesses that are well established, generate constant sales, have solid collateral, and are profitable rely on debt financing.

• One of the key debt financing market trends includes the rising economic uncertainty caused by challenges such as pandemics and geopolitical conflicts, impacting the liquidity requirements of organisations. As a result, companies raise extra capital to continue with various investments. Companies can benefit from the use of long-term debt by buying inventory or equipment, hiring new workers, and increasing marketing.

• Businesses are increasingly adopting debt funding as it allows them to select the tenure required, repayment mode, and the amount needed. The flexibility offered by debt financing also allows them to plan expenses while repaying the loan amount without running into financial woes.

• The debt financing market growth can be attributed to the surging requirement for capital by startups and small businesses, particularly at their beginning stages. Debt financing offers several benefits for startups, due to which it is widely used to purchase assets, pay for expenses, and facilitate expansion.

Moreover, in debt funding, the role of investors begins and ends with lending and its repayment and they do not have the right to interfere with the functioning, operations, or business decisions of the startup. As a result, the founder of the business can run their startup freely and have autonomy over business decisions.

Market Analysis

Based on source, the debt financing market segmentation includes private and public. On the basis of type, the market can be divided into bank loans, bonds, debenture, and bearer bond, among others.

Based on duration, the market can be segmented into short term and long term. The major regional markets for debt financing are North America, Europe, the Asia Pacific, Latin America, and the Middle East and Africa.

The comprehensive EMR report provides an in-depth assessment of the market based on the Porter's five forces model along with giving a SWOT analysis. The report gives a detailed analysis of the following key players in the global debt financing market, covering their competitive landscape and latest developments like mergers, acquisitions, investments and expansion plans.

• Goldman Sachs Group Inc. 

• Bank of America Corporation 

• Deutsche Bank AG

• Morgan Stanley 

• Barclays PLC 

• Banco Santander S.A. 

• Royal Bank of Canada 

• U.S. International Development Finance Corporation 

• Frontier Development Capital Limited 

• European Investment Bank 

• Others

Market Share by Type

As per the debt financing market analysis, bank loans are a common type of debt financing. Banks assess the financial state of each company and provide loans and interest rates accordingly. Additionally, traditional bonds consist of a principal value, a repayment term, and an interest rate. The entities or individuals that purchase the bond turn into creditors loaning money to the business.

Meanwhile, the adoption of debentures encourages long-term funding for the growth of a business. Also, it is a cost-effective form of lending, hence is extensively adopted by organisations. The use of debentures does not reduce the control of the existing shareholders of the company, hence the profit sharing remains in the same fraction.

Market Share by Region

North America accounts for a significant debt financing market share as the United States is a pioneer in implementing large investment projects and making use of bank lending instruments. In the United States, debt funding is being widely used in capital-intensive sectors such as energy, oil and gas, mining and processing of minerals, heavy industry, and infrastructure and environmental projects, among others.

Furthermore, the developed financial system of the United States provides greater opportunities for businesses. The presence of various American and foreign banks in the country helps in meeting the requirements of funds for businesses, allowing them to meet their commercial goals.

Competitive Landscape

Goldman Sachs Group Inc., based in the United States, offers financial services across investment banking, securities, investment management, and consumer banking to a large and diversified client base, including corporations, financial institutions, governments, and individuals. The organisation provides a variety of transactions, including equity and equity-linked offerings, debt issuances, as well as structured and derivative transactions.

Bank of America Corporation, established in 1904 in San Fransico, California, is a leading American financial institution. It provides banking, investment management, and other financial and risk management products and services to individuals, small and mid-sized businesses, large corporations, and governments.

Deutsche Bank AG. was founded in 1870 in Germany in order to promote trade relations between international markets and Germany. Currently, the bank offers services in 1,457 branches in regions including Asia Pacific region, Central Europe, Eastern Europe, and Latin America.

Other players operating in the debt financing market include Morgan Stanley, Barclays PLC, Banco Santander S.A., Royal Bank of Canada, U.S. International Development Finance Corporation, Frontier Development Capital Limited, and European Investment Bank, among others.

Key Highlights of the Report