Asset-based lending activity rebounds as lender confidence remains positive

Asset-based lending activity strengthened in the second quarter of 2026, with new client commitments rising sharply among both bank and non-bank lenders, according to the latest Secured Finance Network (SFNet) Asset-Based Lending Index.

New commitments to new clients increased by 58.7% quarter-on-quarter for banks and 60.9% for non-bank lenders, as businesses continued to seek flexible sources of funding amid higher borrowing costs, inflation and economic uncertainty.

Bank lenders reported a 1.3% quarterly increase in total commitments, while outstandings rose 2%. Among non-bank lenders, total commitments increased by 3.9%, although outstandings declined by 1.2%.

The findings are based on responses from 36 bank and non-bank lenders surveyed between 21 July and 12 August 2026.

Expectations for new business also improved during the quarter.

The bank index for demand increased eight points to 68, with 36% of banks expecting demand to improve over the next three months.

Among non-bank lenders, the demand index increased two points to 83, with two-thirds anticipating an improvement. No lenders in either group expected demand to weaken.

Overall bank lender sentiment increased four points to 59, while the non-bank sentiment index remained higher at 65, despite declining by two points from the previous quarter.

“Businesses are navigating higher costs driven by elevated interest rates and economic uncertainty, creating complex working-capital needs.

“The liquidity and flexibility offered by asset-based lending is increasingly seen as a tool for managing that complexity.”

SFNet also reported an improvement in bank portfolio performance during Q2.

Criticised and classified loans declined by 80 basis points to 10% of outstandings, with nearly three-fifths of banks reporting a decrease.

Bank non-accruals fell to 0.78%, below the 30-year average of 0.92%, while gross write-offs declined to 0.09%, compared with a long-term average of 0.41%.

The picture among non-bank lenders was more mixed. Criticised and classified loans and non-accruals increased, although two-thirds of respondents reported no change in criticised and classified loans.

Gross write-offs among non-bank lenders remained at 0% of outstandings, with all respondents reporting no quarter-on-quarter change.

SFNet said the results point to renewed momentum in the asset-based lending market as businesses use flexible funding structures to address changing working-capital requirements.