ABL survey finds lender confidence rebounding in Q2 2025

The Secured Finance Network (SFNet) reports a resurgence of optimism in the US asset-based lending (ABL) market, with both bank and non-bank lenders showing stronger confidence after a volatile first quarter marked by tariff disruptions.

According to SFNet’s Q2 2025 Asset-Based Lending Index and Lender Confidence Index, survey results gathered between late July and mid-August indicate a rebound across lending categories. Bank lenders’ confidence rose 7.4 points to 56.5, still in neutral territory but signalling expectations of steady conditions in the months ahead. Non-bank lenders, meanwhile, posted a sharper increase, with confidence climbing 10.8 points to 63.3, moving into positive territory and reflecting cautious optimism for near-term improvement.

“When stripping out volatile trade and inventory components, final sales to private domestic purchasers grew by just 1.9%, highlighting underlying demand weakness. Risks tied to tariffs, inflation, and Fed policy remain, but ABL appears to be on strong footing to meet evolving borrower needs.”

Lending activity expands in Q2

Survey data revealed solid gains in both commitments and new lending activity:

• Bank commitments rose 1.1%, while non-bank commitments grew 5.2%.
• New outstandings surged 6.5% for banks and an impressive 47.4% for non-banks, highlighting strong borrower demand.

New outstandings measure the amount borrowers draw under ABL facilities during a given period, often serving as an indicator of new deal activity and working capital needs.

Mixed portfolio performance

For banks, portfolio quality showed a mixed picture. Non-accrual loans increased, write-offs ticked higher but remained within historical ranges, and criticised loans – those with elevated credit risk – declined by 9 basis points. The dip in criticised loans suggests normalisation, with some stressed borrowers improving or exiting portfolios.

Non-bank lenders reported a less favourable profile: both criticised loans and non-accruals climbed, though write-offs held steady and stayed nearly flat as a share of total outstandings. SFNet noted that non-bank lenders’ relatively stable write-off rates point to tighter underwriting standards and more selective origination.

Industry outlook

Despite ongoing macroeconomic headwinds, including uncertainty around tariffs, inflationary pressures, and monetary policy, SFNet’s survey underscores that the ABL market remains resilient.

“Despite broader economic challenges, the asset-based lending industry is healthy and optimistic,” Gumbrecht said. “We’re seeing a surge in new deal activity, stronger renewal cycles, and stable portfolio performance, all of which position the industry to meet growing demand through the remainder of the year.”

The Q2 2025 Asset-Based Lending Index and Lender Confidence Index draw on survey data from leading US bank and non-bank lenders. Full quarterly and annual reports are available through SFNet’s Asset-Based Lending & Factoring Surveys.