SFNet data shows resilient ABL activity and strong factoring growth

The secured finance market delivered a solid performance in 2025, with new data highlighting stable asset-based lending (ABL) activity and strong growth in factoring, despite a more challenging economic backdrop.

Figures released by the Secured Finance Network (SFNet) show that factoring volumes increased by 16.6% year-on-year, reflecting sustained demand for working capital solutions across both domestic and international markets. At the same time, ABL commitments and outstandings remained broadly stable, underlining the sector’s resilience amid ongoing market uncertainty.

“Despite a complicated economic backdrop and increased volatility across credit markets, secured finance continues to demonstrate its strength and adaptability,” he said. “Asset-based lenders and factors are stepping in where capital is needed most, providing stability, flexibility, and liquidity to businesses navigating uncertainty. As we look ahead, the industry remains well-positioned to support growth and respond to evolving market dynamics.”

The results arrive amid heightened attention on credit markets, including high-profile bankruptcies in private credit and continued tightening in traditional bank lending.

Mixed but stable picture for ABL

The fourth quarter of 2025 presented a mixed but generally steady environment for ABL providers.

Bank commitments edged up by 0.5% quarter-on-quarter, while non-bank commitments rose more sharply by 5.5%. However, bank outstandings declined by 5.1%, largely reflecting seasonal paydowns, while non-bank outstandings surged by 12.6%, pointing to continued growth in alternative lending channels.

Sentiment among lenders also diverged. Banks reported a more optimistic outlook for the coming quarter, with their combined sentiment score rising to 62, indicating a solidly positive view. In contrast, non-bank sentiment dipped slightly to 58, reflecting softer expectations around utilisation, hiring and portfolio performance.

Portfolio trends remained uneven across both segments. While some indicators such as criticised loans improved, others – including non-accruals and write-offs – ticked up modestly, suggesting a continued normalisation of credit conditions rather than systemic deterioration.

Gumbrecht described the current environment as “idiosyncratic, not systemic,” with lenders maintaining a cautious but broadly positive outlook heading into 2026.

Factoring continues strong growth trajectory

In contrast to the more measured ABL performance, the factoring sector posted robust growth through 2025, even as economic conditions softened in the latter part of the year.

The US economy slowed in the fourth quarter, with GDP growth easing to 0.7% amid weaker consumer spending and the impact of a federal government shutdown. Despite this, factoring volumes continued to expand, supported by demand for flexible, short-term financing solutions.

Sentiment in the factoring market remained firmly positive, with the overall confidence score at 61 in the second half of the year, despite a slight decline from earlier in 2025. Confidence in portfolio performance improved, while views on broader business conditions remained neutral.

Operational metrics also pointed to steady activity. Total funds in use increased by 4.1%, and average days sales outstanding rose slightly to 46.8 days.

Gumbrecht said the results reinforce factoring’s role as a dependable source of liquidity, particularly in uncertain economic conditions. He added: “The industry is on a strong growth track and well-positioned to support clients and capture new opportunities in the year ahead.”

Secured finance holds firm amid uncertainty

The latest survey results come at a time of increased attention on global credit markets, with tightening lending standards, persistent inflation concerns and questions over the economic outlook creating a more cautious environment.

Within this context, secured finance providers across both ABL and factoring have continued to demonstrate resilience, offering businesses access to capital when other funding sources may be constrained.

With steady ABL performance and strong momentum in factoring, the sector appears well placed to navigate ongoing uncertainty and support business growth into 2026.