SFNet Data Highlights Strong Year-End Performance in ABL and Factoring

Insights from the Secured Finance Network show steady ABL activity and strong factoring growth despite a moderating economic environment and a flurry of private credit headlines

NEW YORK--(BUSINESS WIRE)--The Secured Finance Network (SFNet) has released its 2025 Asset-Based Lending and Factoring survey results, highlighting the continued resilience of secured finance markets despite uncertainty in the macroeconomic environment.

• Factoring volume increased 16.6% year over year, reflecting strong demand across both U.S. and international markets
• ABL commitments and outstandings remained stable overall, with bank commitments rising 0.5% and non-bank outstandings jumping 12.6% in Q4

“Despite a complicated economic backdrop and increased volatility across credit markets, secured finance continues to demonstrate its strength and adaptability,” SFNet CEO Rich Gumbrecht 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. At the same time, uncertainty around interest rates, inflation, and economic growth has created a more cautious operating environment. Within this context, secured finance providers have continued to play a critical role in delivering flexible capital to businesses.

Asset-Based Lending:

According to the Q4 survey, conducted between late January and mid-February, banks were slightly more optimistic than non-banks about industry conditions over the next quarter. For banks, the combined sentiment score rose three points to 62 (scores over 60 represent a solidly positive outlook), driven by improved expectations for business conditions, demand, and portfolio performance. For non-banks, the combined score declined four points to 58, as softer outlooks for utilization, hiring, and portfolio performance more than offset modest gains in business conditions.

“While economic growth slowed in the fourth quarter, the asset-based lending industry remains resilient and well-positioned,” Gumbrecht said.

And indeed, the fourth quarter of 2025 reflected a mixed but stable environment for both banks and non-banks:

• Total commitments for banks increased 0.5% from the prior quarter; total commitments for non-banks rose 5.5%
• Total outstandings for banks declined 5.1% quarter over quarter, reflecting seasonal paydowns, while outstandings for non-banks surged 12.6%

Similar to the previous quarter, bank portfolio performance remained mixed. Non-accruals and write-offs increased modestly, while criticized loans continued to trend downward, suggesting ongoing normalization across portfolios.

Non-bank portfolio performance was similarly uneven. Criticized loans and non-accruals increased, while write-offs remained stable as a share of outstandings, reflecting continued discipline in underwriting and a more selective approach to new originations.

“Credit conditions remain idiosyncratic, not systemic,” Gumbrecht added. “Lenders are closely monitoring portfolios and remain cautiously optimistic about demand trends heading into 2026.”

Factoring:

SFNet’s year-end factoring survey found strong growth in factoring volume in 2025 despite a slowing economic backdrop in the second half of the year.

The U.S. economy cooled in the fourth quarter, with GDP growth slowing to 0.7%, impacted in part by the federal government shutdown and softer consumer spending. While job growth remained positive, it has been uneven, and inflation pressures persist, creating a more complex environment for lenders and businesses.

That said, the factoring sector remains healthy and resilient. Overall, according to the year-end survey, factoring volume increased by 16.6% among respondents reporting in both H2 2024 and H2 2025, with both U.S. and international activity contributing to the growth.

The combined factoring sentiment score edged down from H1 2025 to H2 2025, declining six points to 61, still strongly positive, suggesting that factors remain generally optimistic about the industry outlook. Confidence in portfolio performance improved slightly to 75, and views on general U.S. business conditions remained neutral at 50.

Total funds in use increased by 4.1% among factors reporting in both H1 2025 and H2 2025. Average days sales outstanding edged up 1.3 days to 46.8.

“While the outlook remains uncertain, factoring continues to prove its value as a reliable source of liquidity,” Gumbrecht said. “The industry is on a strong growth track and well-positioned to support clients and capture new opportunities in the year ahead.”

The Asset-Based Lending Index, Lender Confidence Index, and Factoring Survey are based on survey data from leading bank and non-bank lenders. Full quarterly and annual data reports are provided to SFNet members, with summaries available at SFNet Asset-Based Lending & Factoring Surveys.

About Secured Finance Network

Founded in 1944, the Secured Finance Network is an international trade association connecting the interests of companies and professionals who deliver and enable secured financing to businesses. With more than 1,000 member organizations throughout the U.S., Europe, Canada and around the world, SFNet brings together the people, data, knowledge, tools and insights that put capital to work. For more information, please visit SFNet.com.