ABL activity rebounds as lender confidence remains positive

Asset-based lending (ABL) activity in the US rebounded during the second quarter of 2026, with new client commitments rising sharply across both bank and non-bank lenders, according to the latest Secured Finance Network (SFNet) data.

SFNet’s Q2 2026 Asset-Based Lending Index and Lender Confidence Index found that lenders remain optimistic about the coming months as businesses increasingly seek flexible sources of finance to manage working capital amid higher borrowing costs, persistent inflation and economic uncertainty.

New commitments with new clients increased 58.7% quarter-on-quarter among banks and 60.9% among non-bank lenders during Q2.

Total bank commitments increased 1.3% over the quarter, while outstandings rose 2%. Among non-banks, total commitments increased 3.9%, although outstandings declined 1.2%.

Expectations for new business demand also increased during the quarter.

The bank index measuring expectations for demand rose eight points to 68, with 36% of respondents 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 bank or non-bank respondents said they expected demand for new business to weaken.

“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.”

Overall lender sentiment remained positive. The combined confidence score for banks increased four points to 59, while the non-bank score remained higher at 65, despite declining two points from the previous quarter.

SFNet also reported an improvement in portfolio performance among bank asset-based lenders.

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

Non-accruals fell to 0.78% of outstandings, 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%.

Portfolio performance among non-bank lenders was more mixed, with criticised and classified loans and non-accruals increasing during the quarter.

However, two-thirds of non-bank respondents reported no change in criticised and classified loans, while gross write-offs remained at 0% of outstandings. All participating non-bank lenders reported no quarter-on-quarter change in write-offs.

The Q2 2026 Asset-Based Lending Index and Lender Confidence Index are based on survey data from bank and non-bank asset-based lenders, with 36 lenders participating in the latest survey conducted between July 21 and August 12.