Syndicated Loans Market Expected to Reach $3798.4 Billion by 2031—Allied Market Research

According to a new report published by Allied Market Research, titled, “Syndicated Loans Market," The syndicated loans market was valued at $1018.72 billion in 2021, and is estimated to reach $3798.4 billion by 2031, growing at a CAGR of 14.2% from 2022 to 2031.

The participation of multiple lenders in a syndicated loan to finance a borrower’s project is a reinforcement of the borrower’s good market image. Borrowers that have successfully paid broadly syndicate online loans in the past elicit a positive reputation among lenders, which makes it easier for them to access credit facilities from financial institutions in the future. Furthermore, the borrower is not required to meet all the lenders in the syndicate to negotiate the terms of the loan. Rather, the borrower only needs to meet with the arranging bank to negotiate and agree on the terms of the loan. The arranger then does the work of establishing the syndicate personal loan, bringing other lenders on board, and discussing the loan terms with them to determine how much credit each lender will contribute.

Furthermore, major market players are undertaking various strategies to increase the competition and offer enhance services to their customers. For instance, in February 2022, Symphony, a leading markets’ infrastructure and technology platform partnered with Digital Asset, a software and services provider that helps enterprises build economic value through interconnected networks, to generate efficiency and remove manual processes in the broadly syndicated loans (BSL) market. Moreover, Symphony and Digital Asset have created a straight through processing (STP) workflows aimed at tackling information mismatch, trade breaks, human errors and the lack of appropriate collaboration tools in the syndicated loans space. These syndicated loans market trends by the market players will provide major lucrative opportunities for the syndicated loans market growth.

On the basis of use of proceed, the working capital segment is the highest growing segment attributed to the fact that a working capital loan can be an effective way to remain agile as an organization and respond to unforeseen opportunities by securing syndicated leveraged finance. In addition, cyclical or seasonal business models can be boosted by working capital loans, with the loan financing immediate operational expenses during low-revenue periods. Furthermore, working capital loans are used to help company’s bridge financial gaps, such as the time delay between the collection of accounts receivable and the need to repay debt or accounts payable.

Based on region, North America attained the highest growth in 2021. This is attributed to the rise in the exponential growth of medium and large size enterprises across the North America. In recent years, there has been significant focus on the development of technological solutions (such as distributed ledger technology (DLT) and smart contracts) for the syndicated loan market with the aim of improving the negotiation, execution, administration and trading of loans ideally through the adoption of single platform solutions in North America.

The COVID-19 pandemic had a negative impact on the syndicated loans market, since large scale development of projects were hindered due to the implement of lockdown, and projects were put on hold or were cancelled which incurred huge losses for the borrowers as well as lenders. Moreover, as the pandemic negatively impacted the economy, lenders were hesitant to finance any project in a syndicate online loan due to fear of incurring losses. Thus, the pandemic had a negative impact on the syndicated loans industry.

Key Findings of the Study

• By type, the term loan segment led the syndicated loans market size in terms of revenue in 2021.
• By industry vertical, the financial services segment accounted for the highest syndicated loans market share in 2021.
• By region, North America generated the highest revenue in 2021.

The key players profiled in the syndicated loans market analysis are Acuity Knowledge Partners, Bank Handlowy w Warszawie S.A., Bank of China (BOC), Bank of the West, Capital One, CLAAS Group, EBRD, JPMorgan Chase & Co., Mizuho Bank, Ltd., Mitsubishi UFJ Financial Group, Inc., PT Bank BTPN Tbk, State Bank of India, The SILC Group, Truist, Union Bank of India., AXYON.AI, and HubX. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.