The asset-based lending market remained stable in Q3/23 despite concerns about interest rates, consumer financial stress, and an increase in commercial bankruptcies. The findings were based on data compiled by the Secured Finance Network (SFNet) through surveys of bank and non-bank lenders, which assessed key indicators for the quarterly Asset-Based Lending Index and SFNet Confidence Index. While new origination activity was muted, portfolios showed no significant signs of deterioration.
The report found that asset-based loan commitments for banks remained flat in Q3/23, with outstandings falling by 2.3%. Commitment origination and runoff were behind the muted commitment growth, with a decrease in new commitments with new clients and an increase in runoff, reducing net commitments. Non-banks reported stronger growth in total commitments and outstandings in Q3/23, with a significant decrease in commitments with new clients.
Both bank and non-bank lenders reported minor changes in credit-line utilization rates, and the overall ABL portfolio performance was on par with historical trends, with portfolios remaining generally healthy. The report also noted that while hope remains for a soft landing, market confidence was impacted by concerns about interest rates, consumer financial stress, and commercial bankruptcies.
