Asset-based Lending Market - By Type (Inventory Financing, Receivables Financing, Equipment Financing), By Interest Rate (Fixed Rate, Floating Rate), By End User (Large Enterprises, Small & Medium-sized Enterprises) & Forecast, 2024 - 2032
Published Date: July - 2024 | Publisher: MRA | No of Pages: 240 | Industry: Professional-Services | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationAsset-based Lending Market - By Type (Inventory Financing, Receivables Financing, Equipment Financing), By Interest Rate (Fixed Rate, Floating Rate), By End User (Large Enterprises, Small & Medium-sized Enterprises) & Forecast, 2024 - 2032
Asset-based Lending Market Size
Asset-based Lending Market was valued at USD 661.7 million in 2023 and is expected to grow at a CAGR of over 10% between 2024 & 2032.
To get key market trends
The lending market is booming right now, thanks to the economy recovering and businesses doing well. Companies are seeing more orders for their products and services than ever before, which means they need more money to keep up with the demand. To seize new opportunities, businesses need to buy more supplies, equipment, and other stuff. But getting loans from banks can be tough, especially for businesses that have had a rough time in the past. Asset-based lending (ABL) is a great alternative because it lets businesses use the stuff they already own, like inventory, equipment, and money owed to them, to get the money they need. ABL is a lifesaver for businesses because it's easy to get and can be tailored to their specific needs.
| Report Attribute | Details |
|---|---|
| Base Year | 2023 |
| Asset-based Lending Market Size in 2023 | USD 661.7 Million |
| Forecast Period | 2024-2032 |
| Forecast Period 2024-2032 CAGR | 10% |
| 032 Value Projection | USD 1.5 Billion |
| Historical Data for | 2021-2023 |
| No. of Pages | 210 |
| Tables, Charts & Figures | 218 |
| Segments covered | Type, Interest Rate, End User |
| Growth Drivers |
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| Pitfalls & Challenges |
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What are the growth opportunities in this market?
Hey there! Let's chat about something big that's driving the growth of the asset-based lending (ABL) industry. It's all about having more options to get money! With the ups and downs of the economy, businesses are looking for ways to borrow money that don't just involve banks. By diversifying their funding sources, they can reduce the risk of putting all their eggs in one basket. This helps them keep their doors open and keep growing, no matter what. ABL is a great choice for businesses because it's a flexible and reliable way to get money. It's based on the value of the company's assets, so even if traditional lending is being stingy or cash flow is being unpredictable, ABL can help fill the gap. Not only does this diversification give businesses financial stability, but it also helps them adapt to the ever-changing economy. They can weather the storms and come out stronger on the other side.
For instance, in April 2024, working capital commitments in the ABL (Asset-Based Lending) market increased, as reported by the Secured Finance Network in its annual Asset-Based Lending Industry Survey, which surveyed bank and non-bank lenders. While SFNet reported that fewer new client deals were made in 2022 than in 2023, the deals that were made were greater in value.
Hey, there are some big concerns about how asset-based lending works, where lenders give out loans using assets as collateral. The problem is figuring out the correct value of these assets, like machines, buildings, stuff in storage, and money owed to the business. It's not always easy. Stuff happens that can change how much these assets are worth, like changes in the economy, people not wanting them as much anymore, and technology getting better. This makes it tough to say exactly how much the collateral is worth. If the banks don't do a good job figuring out the value, they might end up giving out too much or too little money. If they give out too much, they might lose money if the business doesn't pay back the loan, since the collateral might not be worth enough to cover the debt. If they give out too little, the business might not be able to get the money it needs to keep running.
Asset-based Lending Market Trends
Technology is rapidly changing the way that lenders work. They are using new tools to evaluate, track, and handle collateral assets. These tools are making it easier to value assets accurately and to manage the risks associated with them. One of the most important new technologies is blockchain. This technology can create a transparent and permanent record of asset ownership and transaction history. This can make the verification process faster and easier, and it can strengthen the trust between lenders and borrowers. Another important trend is the use of artificial intelligence (AI). This technology can be used to analyze data and make predictions. This can help lenders to make better decisions about which assets to lend against and how much to lend. Overall, the increasing integration of technology is having a major impact on the ABL business. These new technologies are making it easier for lenders to evaluate, track, and handle collateral assets. They are also reducing the risks associated with lending and making the verification process faster and easier.
Hey there! Have you noticed how businesses today need more flexible ways to get their hands on cash? With the business world changing all the time, companies need financing that can keep up with them. That's where asset-based lending (ABL) comes in. ABL is like a money machine that uses a company's assets, like equipment or inventory, as collateral to back up a loan. This gives businesses a quick and easy way to get the cash they need, whether it's for day-to-day operations or for growing their business. What's cool about ABL is that it's flexible. Businesses can tailor it to their specific needs, which makes it a perfect fit for companies that are growing and changing. And get thismore and more companies are using ABL not just for emergencies but also for things like buying new businesses or improving their operations. So, yeah, the demand for ABL is on the rise, and it's all because it offers businesses a flexible and convenient way to get the financing they need to succeed.
The business world is shifting towards prioritizing sustainability and making responsible choices that align with Environmental, Social, and Governance (ESG) principles. Lenders are taking note and incorporating these factors into their decision-making processes. Why the shift? Lenders are recognizing the long-term risks associated with supporting unsustainable businesses. They're also responding to the growing awareness of the importance of environmental and social responsibility and the regulations that govern it. So, what does this mean for asset-based lenders (ABL)? They're evaluating not just the collateral itself, but also factors such as the environmental impact of manufacturing processes and the social impact of the asset's use. This focus on ESG-aligned lending practices is driving a positive change. Companies are encouraged to adopt more sustainable practices in order to qualify for ABL financing. As a result, we're fostering a financial environment that's more mindful and forward-looking.
Asset-based Lending Market Analysis
Learn more about the key segments shaping this market
Based on types of loan, the market is divided into inventory financing, receivables financing, equipment financing, and others. The receivable’s financing segment is expected to register a CAGR of 11% during the forecast period.
- In the ABL industry, the financing segment for receivables has the largest CAGR for several reasons. Firstly, accounts receivable is a valuable and somewhat liquid asset for a lot of companies, which makes them a desirable security for lenders.
- Businesses can immediately access working capital without having to wait for client payments by exploiting the significant amount of money they frequently have tied up in receivables. This promptness is very helpful for sustaining cash flow and assisting with ongoing business operations or expansion plans. Furthermore, receivable finance is an adaptable & scalable option that may expand in alignment with a business's sales, making it a perfect choice for companies that are expanding quickly.
- Furthermore, companies are looking for more stable & predictable funding solutions in an unstable economic climate. Due to its strong correlation with actual sales and income streams, receivable financing offers a degree of certainty & stability that is highly regarded by lenders and borrowers alike, prompting its explosive rise in the ABL market.
Learn more about the key segments shaping this market
Based on end user, the market is divided into large enterprises & Small and Medium-sized Enterprises (SMEs). The Small and Medium-sized Enterprises (SMEs) segment dominated the global market with a revenue of over USD 900 million in 2023.
- The ABL industry is dominated by the SMEs segment due to their financing needs and obstacles. Due to their often-smaller size and lack of significant collateral and lengthy credit records, SMEs frequently have trouble obtaining standard bank loans. With ABL, these companies may leverage their assets—such as inventory, equipment, and receivables—to obtain loans, giving them an easily accessible and adaptable financing option.
- SMEs, who may have great assets but not enough cash to finance operations and expansion, will especially benefit from this. Moreover, SMEs require quick and flexible funding solutions as they are frequently more agile and go through faster growth phases.
- The structure of ABL, which links borrowing capacity to asset value, fits quite nicely with SMEs' erratic and changing financial demands. The dominance of this market sector is further enhanced by the fact that SMEs find it simpler and faster to receive funds through ABL due to the fintech advances that expedite the asset appraisal and lending processes. Due to this, ABL has developed into a crucial financial tool for SMEs, helping them to successfully manage economic uncertainty, sustain cash flow, and take advantage of development prospects
Looking for region specific data?
Hey there! Guess who's the boss in the asset-based lending game? You guessed it, the Asia Pacific region! In 2023, they took the prize with a whopping 35% of the global market. Why's Asia Pacific so hot for this type of lending? Well, it's all about their supercharged economies, thriving businesses, and growing financial scene. And let's not forget the crazy-fast growth of small and medium-sized businesses (SMEs) in countries like China and India. Unfortunately, these SMEs often have a tough time getting traditional bank loans because they don't have a long track record or meet all the strict requirements. That's where asset-based lending (ABL) comes in. It's like a lifesaver, allowing businesses to borrow money by using their assets like inventory and accounts receivable.
Significant developments in fintech and digital financial services have also been made in the Asia Pacific region. These developments have reduced the asset appraisal and monitoring process, increasing the effectiveness and accessibility of ABL. The governments in the area are also becoming more pro-financial and innovative, putting laws and policies into place that promote ABL and other alternative financing options. This governmental backing and the increasing recognition of ABL by different businesses have helped to make it widely used.
The demand for ABL is further fueled by the fact that many of the region's broad and diverse industrial base enterprises have sizable tangible assets that can be utilized as collateral. The Asia Pacific area is now a leading force in the worldwide ABL market due to the confluence of these elements, which include rapid economic expansion, benevolent regulatory regimes, technological advancements, and the need for flexible finance options.
In the United States, businesses have been embracing asset-based lending (ABL) more than ever before. This popularity can be traced back to several reasons. Firstly, the U.S. is bursting with innovation. Its companies are constantly thinking of new and better ways to do business. The government supports this spirit through regulations that encourage growth. This combination of creativity and supportive laws creates an ideal environment for businesses to flourish. The U.S. is home to a vast number of small and medium-sized businesses (SMEs). These businesses often struggle to access traditional financing options due to their size. ABL fills this gap, providing flexible funding solutions that match their needs. SMEs need financing to survive and grow, whether it's for managing cash flow, investing in expansion, or weathering economic ups and downs. The U.S. has a strong legal and financial framework that governs ABL. This ensures that assets used as collateral are properly valued, and lender rights are protected. This trust in the system makes ABL an attractive option for both borrowers and lenders. Additionally, the U.S. is a hub for financial technology (fintech) solutions. These solutions provide innovative and efficient ways to manage ABL transactions. The availability of advanced fintech makes ABL a convenient and effective option for businesses across a wide range of industries. With its innovative business environment, strong regulations, and advanced financial system, the U.S. is a prime market for ABL. It offers businesses of all sizes a flexible and reliable way to access financing, helping them thrive and contribute to the overall economic growth.
For instance, in March 2023, the banking sector faced what is currently regarded as the biggest banking crisis of the past ten years. It began with the failure of three U.S. banks. A year later, the banking sector is still recuperating, and banks are assessing new business strategies, placing a greater emphasis on customer connections, and exploring new avenues in the ABL arena.
Japan's Asset-Based Lending Market Thrives Amidst Economic Challenges Japan has a thriving asset-based lending (ABL) market thanks to its strong industrial roots. Businesses are actively seeking this type of financing to overcome financial hurdles in today's uncertain economy. Traditional banks often have rigid lending requirements, making it difficult for businesses, especially small and medium enterprises (SMEs), to secure loans. ABL offers a viable alternative, allowing them to leverage their assets for financing. Japan's emphasis on efficiency and technological advancements have fostered sophisticated asset management and valuation systems. These systems streamline the ABL process, making it easier for businesses to obtain financing. Furthermore, Japan's aging population and slow economic growth have prompted companies to reassess their financial strategies. ABL has become an attractive option because it provides flexible and reliable financing solutions that businesses can rely on in these challenging times.
In South Korea, businesses big and small are the backbone of the economy. These companies rely on quick access to cash to keep their operations running smoothly. As a result, South Korea has developed a thriving industry for Asset-Based Lending (ABL). ABL is a type of financing that allows businesses to use their assets, such as inventory and accounts receivable, as collateral for loans. South Korea's advanced technology infrastructure makes it easy for businesses to adopt fintech solutions that streamline and simplify the ABL process. The government has also updated laws to make it easier for businesses to access alternative financing options. As a result of these factors, more and more businesses in South Korea are turning to ABL to manage their cash flow, fund their operations, and support their growth plans.
China has become a global leader in the asset-based lending (ABL) market due to its massive manufacturing sector, rapid economic growth, and abundance of small businesses. Access to traditional bank loans is often tough for Chinese companies due to stringent collateral requirements. ABL offers an attractive alternative, allowing companies to use their inventory, accounts receivable, and other assets as collateral to secure funding. The ABL industry in China has also benefited from government support for financial innovation and the growth of a robust fintech ecosystem. Moreover, China's vast industrial and commercial activities have created a huge demand for flexible financing options, solidifying China's position as the world's top ABL market.
Asset-based Lending Market Share
Wells Fargo and Bank of America dominate the Asset-Based Lending (ABL) market, each holding over 10% of the market share. Wells Fargo stands out with its vast network that spans industries and geographies. Its extensive branch network provides access to countless businesses, making it a top choice for ABL. Companies seeking ABL prefer Wells Fargo because of its wide reach and financial stability. This allows the bank to offer competitive rates and terms. Additionally, Wells Fargo has a dedicated ABL team that customizes solutions and provides expert advice. To stay ahead, Wells Fargo invests heavily in technology and digital platforms. This enhances the effectiveness and accessibility of its ABL offerings, making it easier for customers to manage their loans.
Bank of America's success in the ABL industry can be attributed to their diverse financial services, global presence, and excellent reputation. They cater to businesses seeking comprehensive solutions for their financial needs. Bank of America operates across borders, serving multinational companies and businesses with global operations. This gives them an edge in the market as they can provide customized solutions for these clients. The bank focuses on mid-market businesses and large corporations, fulfilling the high ABL capacity requirements of these important sectors. Businesses trust Bank of America due to its reliability and reputation for stability. Moreover, Bank of America prioritizes digital innovation and technology advancements. These investments enhance the customer experience, making it easier for businesses to access and manage their financial needs.
Asset-based Lending Market Companies
Major players operating in the ABL industry are
- Wells Fargo
- Bank of America
- JP Morgan Chase & Co.
- Citizens Bank
- PNC Bank
- KeyBank
- Capital One Bank
Asset-based Lending Industry News
- In March 2024, large amounts of tangible assets that can be used as collateral were held by many of the diverse and broad industrial base's firms in the Asia Pacific region, which in turn drove the demand for ABL. Due to the combination of these factors—which include the demand for flexible financing choices, technology improvements, supportive regulatory frameworks, and rapid economic expansion—the Asia Pacific region is currently a dominant force in the global ABL industry.
- In October 2023, the international fintech software partner for secured credit, Solifi, announced the latest product improvements for ABLs. Several new features were introduced in the update with the goal of enhancing customer experience, automation, and reporting to increase efficiency. The company's SaaS Open Finance Platform makes it possible to roll out new services that enhance borrower and lender communication quickly. These new features provide innovations to the company's ABL and receivables finance, benefiting lenders and clients without disrupting their business operations, thereby reducing the reliance on human reporting.
The asset-based lending market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD billion) from 2021 to 2032, for the following segments
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Market, By Type
- Inventory financing
- Receivables financing
- Equipment financing
- Others
Market, By Interest Rate
- Fixed rate
- Floating rate
Market, By End User
- Large enterprises
- Small and Medium-sized Enterprises (SMEs)
The above information is provided for the following regions and countries
- North America
- U.S.
- Canada
- Europe
- Germany
- UK
- France
- Italy
- Spain
- Rest of Europe
- Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
- Rest of Asia Pacific
- Latin America
- Brazil
- Mexico
- Rest of Latin America
- MEA
- UAE
- Saudi Arabia
- South Africa
- Rest of MEA
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